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NFT Lending on Solana: Intro Guide

An easy to read intro guide on NFT lending on Solana.

NFT Lending on Solana: Intro Guide

What is NFT Lending?

NFT lending is where holders of non-fungible tokens (NFTs) can provide their NFTs as collateral to obtain loans in the form of assets.

Loans are typically facilitated by NFT lending platforms, which act as intermediaries between borrowers and lenders.

In other words, if you need financial resources for a specific purpose, you can use your NFT as collateral on these platforms and borrow a quantity of tokens, such as SOL.

If you want to act as a lender, you can simply provide a quantity of your tokens (SOL) to borrowers, and at the end of the loan duration, when they repay, you will receive back the borrowed amount + interest.

On Solana, we have excellent protocols like Sharkyfi, Frakt, Rainfi, and Citrus, which have already surpassed a total volume of 9.21 million SOL.


What's the difference between Lender and Borrower?

Lender: A lender is an individual, institution, or entity that provides funds, assets, or resources to another party with the expectation of being repaid, typically with interest or some form of compensation. Lenders are the ones who supply the money or assets that borrowers need. They take on the financial risk of lending and are entitled to receive back the amount borrowed, plus any agreed-upon interest or fees.

Borrower: A borrower is an individual, institution, or entity that receives funds, assets, or resources from a lender with the option to repay the borrowed amount, usually along with interest or other agreed-upon terms. Borrowers are the recipients of the funds or assets and use them for a specific purpose, such as making a purchase, investing, or covering expenses. They are responsible for repaying the borrowed amount according to the terms of the loan agreement. On NFT Lending P2P platforms, the borrower is not obliged to repay the loan.

How the lending process works

Look at this image to better understand how the peer-to-peer process works on NFT Lending platforms


As Borrower:

  • You will deposit your NFT as collateral and you will receive tokens (SOL) in exchange for this;

  • The loan has a duration and a certain interest rate;

  • At the end of the loan, you have two options:

  • 1- Repay the loan with the interest rate, in this way, you will once again regain ownership of the NFT that you originally put forth as collateral.

  • 2- Do not repay the loan. In this case, you retain the borrowed SOL tokens, but the ownership of your NFT will be transferred to the lender.

As Lender:

  • You will make an offer, and deposit tokens (SOL);

  • You will define the terms of the loan, such as duration, interest rate, and other metrics;

  • As soon as the Borrower takes your loan, the duration starts;

  • At the end of the loan, the Borrower has the right to repay or not;

  • If the Borrower fails to repay the loan, ownership of the NFT used as collateral will transfer to you;

  • If the Borrower repays the loan, you will receive the borrowed amount along with the accrued interest.

Advantages of NFT Loans

  • Put liquidity to work and generate "passive" income;

  • Higher APY through higher-risk loans;

  • Loan to acquire NFTs at a discount if the borrower defaults;

  • Short selling is possible in the market: take out an NFT loan, get SOL, and swap to USDC if you anticipate a market drop;

  • As a borrower, you can gain instant liquidity to buy/trade/mint NFTs;

  • Loan for arbitraging NFTs or tokens;

  • Loan to provide liquidity for DeFi protocols like Orca or Raydium;

  • Loan to provide liquidity in NFT AMMs, such as Hadeswap or Tensor.

Disadvantages of NFT Loans

  • There's always the risk of the NFT price falling significantly below the loan value;

  • Your liquidity is tied up for a certain period during the loan;

  • Depending on the platform, it might take days for your loan offer to be accepted;

  • Risks related to the protocol or smart contract.


Lending Platforms on Solana


Sharky brings financial tools to NFTs. Through a very well-developed product and an intuitive interface, today they lead the NFT Lending market on Solana and help solve the problem of illiquidity that we have in NFTs.

Sharkyfi focuses a lot on user experience and offers a very easy and intuitive platform. The platform already offers users a predetermined Duration and APY. The platform's reward system is through $FISHY.

Duration is 7, 14, or 16 days. And the APY goes from 90% to 360%. The grace period on Sharkyfi is 4 hours.

If you are a Lender, just offer the amount of SOL for a certain collection.

If you are a Borrower, you can choose and accept the offer that suits you best.

After the duration of the loan, as a Lender, you get your SOL amount again (if the borrower repays) + a % interest. If the borrower fails to repay, you lose the loan but receive the NFT from the borrower.


Citrus is a P2P lending platform created by the Famous Fox Federation team, which was released in early February 2023. It is the second most liquid platform at the time this guide is being written.

Anyone can make their own terms with the given preset options for loan offers for NFTs. Borrowers can accept any Loan offer that exists for that collection with the given terms on that loan. The platform's reward system is through $JUICE.

They also have the BNPL feature (Buy Now, Pay Later), so you can buy NFTs from marketplaces instantly and repay later. You can access this function through the Mortgages tab.

Citrus offers the possibility to customize a loan offer fully. From APY (between 80% and 240%), loan duration (3, 5, 7, 14, 21,30,45 days), loan amount, and the # of offers (capped at 50 per transaction) are things you can set yourself.

Citrus has a feature called "LTV offers". Through it, it is possible to make offers based on a specific LTV and you can also set a maximum limit (LTV is the loan-to-value ratio which aids lenders in managing risks when creating loan terms).

The platform also offers the "Pool Offer" feature. When activated, you automatically re-create offers after repayment.

Borrowers get reduced fees (50% off) if they are the holder of a staked FFF or have a fox on a mission.



FRAKT is a very complete protocol, with several functions that were recently launched, and they are the third-largest lending platform at the time this guide is being written. And regarding the other platforms, it also offers Perpetual Loans.

Their products are:

1- Perpetual loans (Peer to pool) and isolated lending pools

2- Flip Loans and aggregated lending pool

3- Bonds (Higher LTV loans) and automated lending strategies

The grace period on Frakt is 12 hours.

They also have the “Automated Lending Strategies” (still in beta). In the future, it will be possible to create your own strategy and define its parameters. There will be a % fee on Strategy performance for depositors so that if the strategy is profitable, the strategist will get rewarded for it (DAOs could become strategists to generate yield for their communities for example).

The platform rewards system is through "Banx Adventures", it is necessary to be a holder to participate. Every week you can send your Banx on Adventures to receive rewards.


Rainfi is a rapidly growing NFT lending platform on Solana that offers a customizable and automated experience for lenders, while also providing a familiar DeFi experience for borrowers.

It was introduced in October 2022 and is currently the platform with the lowest market share.

As a Lender, you have access to the “Lending Pools” feature. Utilizing the lending pool system, the protocol provides users with a variety of personalized options to automate and enhance the efficiency of their capital.

You can customize many aspects like:

  • LTV Ratio — Loan-To-Value of your loan to the floor price of the NFT

  • Interest Rates — The interest you charge on your loan

  • Duration- How long your loan is for

  • Currency- (SOL, USDC, MSOL)

  • Compounding- Roll up your interest earned

  • Lending Amount- How much do you loan out

Borrowing is a straightforward experience that allows you to opt for the most suitable offer based on your preferences and criteria such as Loan Amount, Duration, Interest, and APR.

The platform rewards system is through "Droplets", the higher your volume on the platform, the more reward you will generate, as 10 USD = 1 droplet.


Technical Terms NFT Lending:


APY stands for Annual Percentage Yield.

It is a financial term used to express the rate of return or annualized interest earned on an investment or deposit, taking into account capitalization.

The compounding effect refers to the reinvestment of interest or income back into the investment or deposit. By reinvesting the earnings, the total balance grows, and subsequent interest is calculated on the increased balance, leading to exponential growth over time.

Loan-to-Value (LTV) or Loan-to-Floor (LTF):

It is the ratio between the loan amount and the floor price of the NFT.

Example: If the floor price of an NFT is 12 SOL and your loan is 7 SOL, you are borrowing at 58% LTV.

Lending platforms usually already inform you of the LTV, if you want to know the LTV just do the following calculation = (Loan Value/Floor Price)= LTV

Using the previous example in this calculation, it would be 7/12 = 0.58 → 58% LTV

Remember, if you act as a “Lender”, the higher the LTV of your offer, the greater your risk, as you are risking a greater amount of SOL.

If you act as a Borrower, the higher the LTV, this may be better for you, as you are borrowing a larger amount of SOL relative to the price of your NFT.


Represents the duration of your loan. That is, how long your loan will last.

Currently, lending platforms offer different duration options, such as 3, 5, 7, and up to 45 days.

NFTs are very volatile assets, which is why shorter durations are considered “safer”.

The most common duration currently among Solana lending platforms is 7 days.


The asset or item that a borrower offers as collateral for a loan.

You can act by offering your NFT as collateral to borrow an amount of SOL.

Interest rate:

The percentage charged by the lender for borrowing the funds. That is, the percentage of interest you will receive on the loan.

NFT lending platforms offer variable or fixed interest rates.

Interest can range from 80% to 360% APY.

It is important to mention that low-interest offers are more attractive to Borrowers. Try to find something that is profitable for you and attractive to borrowers.


A “default” occurs when the person who took your loan does not return the amount borrowed.

In this case, you will be in possession of the NFT that the borrower used as collateral.

A default can occur for several reasons, such as:

  • The person missed the loan end date/time;

  • The amount borrowed is greater than the current floor price. (Example: You borrowed 10 SOL and the NFT price is 9 SOL, so you may prefer to keep the amount in SOL instead of repaying the loan).

Underwater Loan:

This occurs when the value of a loan is greater than the floor price of the NFT being used as collateral.

For example: If you lend 10 SOL for an NFT that has a floor price of 12 SOL, and after a few days the value of this NFT devalues to 9 SOL, this is considered an “underwater loan” because the amount you lent is higher than the floor price of this NFT.


Conclusion & Insights

1. Do your homework

Before even thinking about lending your Solana, research the platform well. Reputation, track record, fees, rewards, and volume - these are all critical to a secure lending experience. The main platforms currently on Solana are:

- Sharkyfi, Citrus, Frakt and Rainfi.


2. Carefully choose collections

The more you know about the NFT market, the better results you will get. Understand about the collection you are about to borrow.

Over time, you will develop your list of favorite collections based on your loan performance.

Avoid collections that have a high number of “underwater loans”. New collections are also riskier.


3. Diversify (but not too much)

More projects = greater exposure

If you diversify too much, you can get information overload. Because you will need to keep up with the news about the collections you are currently lending.

If you are lending to a collection that will have an airdrop, be aware that most of the time after the airdrop, the price of the collection tends to correct.


4. Interest Rate

Decide the interest rate based on your risk tolerance and market conditions.

Remember to strike a balance - it should be profitable for you, but attractive for borrowers. Keep in mind that some platforms like SharkyFi will have predetermined interest rates.


5. Use Aggregators to help you

We currently have free (some of them have small fees) and paid aggregators on Solana. These aggregators will help you to see all the details about collections.

You can use aggregators like:

- WolfCapital

- LenderLabs

- TextureFi (If you want to borrow your NFT)


6. Keep an eye on your offers

If your offer was accepted, keep an eye on it. Remember the date when the loan will end, monitor the NFT values, and be ready to act if the borrower does not return his loan. 

Most platforms these days have a notification system, so use that to your advantage.


7. Avoid bidding with high LTV when the crypto market is appreciating

When the crypto market is trending upwards, usually many people put their NFTs up for sale, this can result in a reduction in the floor price of a collection. So focus on making offers with a low LTV during these periods.

When the market is in a downtrend or sideways, that moment would be ideal to be more exposed to loans and make offers with a higher LTV.


8. Regarding the current platforms we have available at Solana:

The easiest platform to interact with is Sharkyfi. And it is currently the platform that has the most volume on Solana.

At Citrus you can make offers with more flexible options, and you can find great opportunities with a high APY + short loan durations. Loans with durations of 3 days are very powerful.

FRAKT offers options such as “Flip Loans” and “Perpetual Loans”. You can deposit and withdraw your amount of SOL whenever you want. But generally, the APY of this model is much lower compared to Peer-to-peer loans from Sharkyfi and Citrus.

If you are more knowledgeable and want to automate your lending, Rainfi is a great platform for this, as you can deposit your SOL amount and define lending patterns, thus creating a personalized pool for you. The problem is the current low volume of the platform, which can affect the speed at which offers are accepted.


NFT lending is a new way to earn yield through the NFT market and accumulate more SOL. And it is also possible to protect your portfolio through Hedging strategies.

In summary, the NFT lending market is still chugging along nicely, and even in the middle of a bear market, we are seeing an increase in protocols as well as an increase in users on these platforms. NFT lending protocols focus on improving capital efficiency and exploring income-generating possibilities for NFTs.