epoch length, interest rate, and risk parameters); doesn't need to own the NFTs he
creates the pool(s) for.
Appraiser = the one who puts ETH into the pool to price the NFT
Owner = the one who has an NFT in a pool filled with ETH
Lender = here Abacus, takes custody of the NFT, and gives out the loan.
The pool creator creates a pool. It contains 4 Hoodie Cryptopunks.
Sets collateral slots at 2: This means that 2 Hoodie owners can claim the liquidity at the same time.
Sets tranche size at 1: This means that every tranche can hold 1 ETH.
Sets interest rate at 10%: This means that 10% interest rate is paid out to appraisers. (Protocol takes 5% of that 10%. If interest is 1ETH, the protocol gets 0.05 ETH)
Appraisers see the newly created pool. It’s still empty. They check the current Hoodie Punk floor. It’s at 150 ETH currently.
Appraiser 1: Fills tranche 0-50 ETH for a month lock-up. Appraiser 1 is quite certain that the hoodie floor won’t drop below his tranche fills.
Appraiser 2: Fills tranche 50-150 (puts 100ETH into the spot pool) for a month. He is quite certain as well that his appraisal is correct.
Current ETH in spot pool = 150 ETH. As there are 2 collateral slots, every punk hoodie is now priced at 150 / 2 = 75 ETH.
Appraisers 3,4,5,6 & 7: Fill the Hoodie Spot pool up to 290 ETH for 1 month, which is slightly below the current floor price (each hoodie punk is now priced at 290 / 2 = 145 ETH).