Here's everything you need to know about Strip Finance (2024)

Strip Finance is a Collateralised NFT & DeFi Liquidity Protocol. It’s a peer-to-peer marketplace for crypto loans using collateralized Non-Fungible Tokens (NFTs). It allows borrowers to collateralize their NFTs for loans and the lenders to make proposals in exchange for interest.

Strip Finance – The Platform

Strip Finance is a decentralized peer-to-peer marketplace in which anybody with an NFT may use it as collateral to borrow stablecoin loans. The asset (NFTs) pricing data on the Strip platform will be directly fetched from popular NFT marketplaces such as Rarible, SupeRare, Opensea, and Wazirx without making any changes to the prices of NFTs.

Source: Strip Finance

Strip Finance primarily allows users to lend their NFTs for stablecoins allowing them to attain liquidity without selling or leveraging the value of holdings to mint more NFTs. Furthermore, Strip Finance allows lenders to earn interest on the platform and also gives a chance to acquire defaulted NFTs at discount prices.

STRIP is the platform’s native token, which is used for several functions on the platform. These tokens are also used to pay all platform costs, such as borrowers’ fees and lenders’ interest, as well as for DAO governance (for updates, Airdrop, Community grants, etc).

Understanding Strip Finance’s NFT collateralization

Strip Finance follows the basic principle of the lending/borrowing market for its NFT Collateralisation. Firstly, the borrowers list their NFTs on the P2P marketplace and then the lenders begin to propose how much they are prepared to give against that specific NFT.

The process of negotiation is currently limited and if the borrower does not reply within a defined period, offers will be rejected. However, if both parties have agreed to the transfer, then the ownership of the NFT will be transferred to the marketplace’s smart contract escrow mechanism.

Similarly, NFT is then returned to the borrower upon repayment of the loan amount (principal + interest). Even yet, if the borrower fails to meet his or her obligations under the loan agreement, the lender has the option of calling the loan and reclaiming the NFT to complete the settlement.

Moreover, Strip Finance keeps both parties informed as a precautionary step for the aforementioned problem by providing supplementary data such as loan term duration, payment frequency, and liquidation terms on their website.

Strip Finance – Solving the Problem of Price Discovery with NFTs

Strip Finance determines the NFT prices by fetching the price data from popular NFT marketplaces like Rarible, SuperRare, and OpenSea. It works in correlation with popular NFT marketplaces without making any changes in the prices of the NFTs.

Strip Finance with its decentralized P2P lending allows individual lenders to determine the NFT’s fair value based on a variety of data points such as the artist’s profile characteristics, historical sales averages, the NFT’s trading history, and the owner’s risk score.

Additionally, the platform offers a second alternative of pool lending for better capital deployment. Pool lending helps NFT holders to get fair value for their NFTs. When customers place bids on the Strip Finance platform for NFTs, they will receive realistic offers based on actual market values.

Collaborations and investments: Strip Finance’s Success So Far

Strip Finance’s vision of creating a collateralized NFT lending and borrowing platform on BSC has already put the project on the radar of investors and users in the market. The company has secured a total of $1.5 million in funding from LD Capital, Old Fashion Research, Nothing Research, Tenzor capital, Exnetwork Capital, Valhalla capital, Block0, Shima Capital, Lancer Capital, MEXC Global Exchange, Kryptos Research, Bigcoin, J10M Capital and ZBS Capital amongst others.

Moreover, Strip Finance’s advisory members include Siddharth Menon, COO of WazirX; Jaynti Kanani, CEO of Polygon(Matic); Tamar Menteshvili, Head of Solana’s Ecosystem; and Yida Gao, GP at Shima Capital.

The Team Behind Strip Finance

Strip Finance’s core team consists of Yash Jejani, Yuvraj Chibber, Setu Saurabh, and Varun Satyam, all of whom are seasoned cryptocurrency entrepreneurs with backgrounds in some of the most well-known technology companies, including Ankr, Bithumb, ConsenSys, Bitfinex, Prometheus Labs, and Coldsstack.

NFT Collateralisation: A Better Utility for NFTs

The NFT space is no longer exclusive to digital art. With improved application scenarios, NFTs may be put to good use. This has the potential to significantly disrupt the NFT and Metaverse industries. Additionally, combining DeFi and NFTs paves the way for a more advanced Web 3.0.

Platforms like Strip Finance seek to take NFTs to a whole new level by providing a better utility, through NFT collateralization. This could not only solve the problem of illiquidity in the NFT markets but also give NFTs the deserved value.

Strip Finance with its exclusivity will build the core piece of infrastructure (NFT markets) to enable the growth and acceptance of these digital assets.

Disclaimer: This is a paid post and should not be considered as news/advice.

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Here's everything you need to know about Strip Finance (2024)

FAQs

What are the disadvantages of Treasury STRIPS? ›

Treasury STRIPS, like all bonds, are subject to interest rate risk. This risk arises because when interest rates rise, bond prices fall, and vice versa. STRIPS are particularly sensitive to changes in interest rates because they do not provide semi-annual interest payments that can help offset price changes.

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What is strip finance? ›

Strip financing is the repackaging of different types of obligations—debt, preferred stock, common stock etc. —into one security.

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What is stripping financial information? ›

Stripping could involve: a) a financial institution deleting information from the wire transfer message; b) inserting false information in the wire transfer message; or c) requesting that the transferring institution delete or falsify an incoming transfer message.

What is the minimum amount required for STRIPS? ›

STRIPS par value must be in multiples of $100

The minimum face amount needed to STRIP is $100, and any par amount above that minimum must be a multiple of $100.

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Do you pay taxes on Treasury strips? ›

Each STRIPS is subject to taxes in the same way as the entire security.

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Why would an investor buy T strips? ›

STRIPS are a popular choice for fixed-income investors. They have extremely high credit quality because they are backed by U.S. Treasury securities. Since STRIPS are sold at a discount, investors do not require a large stash of cash to purchase them.

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What is the difference between a strip and a Treasury bill? ›

The big point to remember is STRIPS are fully backed by the US Government, while Treasury Receipts are not. Of course, this could factor into safety and yield. STRIPS are slightly safer and trade with lower yields, while Treasury Receipts are slightly riskier and trade with higher yields.

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Are strip bonds a good investment? ›

STRIPS provides an alternative to traditional bonds for investors who need to rely on definite amounts of money coming due at a specific future date. Although they post negative cash flows until maturity, they may also provide superior yields to traditional bonds in some cases and will always mature at face value.

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Do strips have reinvestment risk? ›

A strip bond has no reinvestment risk because there are no payments before maturity. On the maturity date, the investor is repaid an amount equal to the face value of the bond.

Why is asset stripping bad? ›

Asset stripping weakens a company, which has less collateral for borrowing and may have its value-producing assets stripped out, leaving it less able to support the debt it has.

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What is the earnings striping rule? ›

Earnings stripping is simply a method by which a business entity reduces its tax liability by paying excessive amounts of interest to another corporation.

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Is stripping taxed? ›

Do strippers pay taxes? The IRS requires people to pay taxes on the money they earn, and dancers are no exception. The tax laws apply to cash tips too, and dancers need to know how to stay on the right side of the law.

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Do STRIPS pay monthly interest? ›

Since no interest is paid throughout the borrowing term, STRIPS are sold below par, making them a zero-coupon bond. Treasury STRIPS are sold at a discount to par, i.e. the face value. No coupons (interest payments) are paid to the owners of STRIPS throughout the borrowing period.

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How is strip pricing calculated? ›

Futures Strip Price Calculation

The most common method for calculating a futures strip price deck is a simple average of settlement prices of all contracts within a given year, holding the average of the fifth year from the effective date flat-for-life.

How much is strip in finance? ›

The live Strip Finance price today is $0.006408 USD with a 24-hour trading volume of $64,296.69 USD.

What is the downside to Treasuries? ›

These are U.S. government bonds that offer a unique combination of safety and steady income. But while they are lauded for their security and reliability, potential drawbacks such as interest rate risk, low returns and inflation risk must be carefully considered.

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What are the limitations of strips? ›

Drawbacks of Strips in AI

Limited Real-Time Adaptability: In dynamic environments, the predefined sequential actions in strips may present limitations in adapting to real-time changes.

What are the disadvantages of treasury tags? ›

Clogging and unthreading: If you use treasury tags and then want to remove them, you have to cut them off or unthread them back through the hole punched hole. Shredding and recycling: Because of their metal ends, classic treasury tags can't be put through shredders (and can't be easily recycled unless taken apart).

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Are Treasuries safer than CDs? ›

CDs and Treasuries Offer a High Degree of Safety

Both CDs and Treasuries are considered extremely safe investments. Treasuries are backed directly by the federal government, while CDs are covered by FDIC insurance – which is also backed by the federal government.

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