The result enters the NFT lending area with managed strategies supported by its industry-leading assessments

Breadth and accuracy of ML rating models to provide more reliable LTV for lenders

NEW YORK, February 22, 2023–(BUSINESS WIRE)–Upshot, a firm that builds financial infrastructure for NFTs and other traditionally illiquid assets, today announced its entry into the NFT lending space. Using their machine learning-powered NFT assessments with industry-leading breadth of coverage – over 100 million NFTs from over 100,000 collections – and accuracy – an average MAPE of 3-10% for the best performing collections, Upshot will drive a range of managed lending strategies that take aim to reduce risk while providing competitive terms for lenders.

As the NFT lending market continues to grow and become more competitive – hitting a record high in lending volume, users and quantity last month – lenders need to ensure they don’t overrun loans while remaining competitive in their offerings. Upshot’s machine learning-driven rating models will allow it to offer safe and competitive terms for dozens of collections. These terms and conditions will be published regularly for borrowers to accept. These terms are generated as a result of new lending strategies developed by the Company based on fair value estimates for the NFTs, forward valuations (otherwise known as “recovery rates”), volume, liquidity, wash trading as a percentage of total trading, ownership and transaction wallet concentration and more.

“When we originally launched Upshot, we focused solely on building out the most accurate and comprehensive valuation models to unlock the exotic DeFi x NFT primitives we saw coming in the future,” said Upshot co-founder and CEO Nick Emmons. “Our entry into the NFT lending space is a culmination of this work, and we believe our models will help provide lending exposure for lenders looking to reduce risk and remain competitive in the increasingly active NFT lending market.”

The story continues

While the assessment models are at the core of Upshot’s lending strategies, Upshot has also built out several other components that are critical to successful lenders in the NFT space. These include:

• Recovery rate Models calculate forward-looking estimates of an NFT’s value to predict the future security of an NFT-backed loan and estimate how much money a lender stands to lose when a borrower defaults.

• Standard probability Models take into account the likelihood of a borrower defaulting on their loan, allowing lenders to estimate how often they will miss out on interest income and assess their chances of liquidating the assets.

• Framework for risk management controls the number of collections with lending against NFT and takes into account loan concentration per collection on other lending platforms, owner concentration per collection, Upshot’s own loan concentration per collection, and collection concentration per wallet. This protects both liquidity providers and Upshot from potential disadvantages.

For more information about Upshot and its platform, please visit https://upshot.xyz/.

About Upshot

Upshot is a firm that builds financial infrastructure for NFTs on top of their industry leading NFT valuations. By delivering accurate and reliable assessments in near real-time, Upshot enables the creation of new solutions at the intersection of decentralized finance (DeFi) and NFTs – for the industry and themselves. The Upshot API is currently available and used by teams to enable a variety of use cases. You can learn more about Upshot and its capabilities, visit https://app.upshot.xyz/.

See the source version at businesswire.com: https://www.businesswire.com/news/home/20230222005727/en/

Contacts

Nick Emmons
[email protected]