Prologue Loans & Leverage

PLEASE NOTE:
PROLOGUE LOANS AND LEVERAGE BENEFITS WILL NOT BE AVAILABLE TO HOLDERS UPON THE PROLOGUE LAUNCH.
PROLOGUE LOANS AND LEVERAGE LAUNCH DATE IS TBA.
Seeking a way to get the most value out of your Prologue NFT? Come in search of the aforementioned exclusive boosted yields?
The search is over.

Prologue NFT Value

From previous sections:
  • Prologue NFT = receipt token for prologue vault position
  • Prologue position = ETH deposited, proportional gains and losses in the Prologue Vault
  • The $ETH deposit in the Prologue Position is routed to NFT-backed loans and collects interest, which is distributed to the holder as yield.
The Spice Protocol denominates Prologue Vault Positions in $ETH, so your Prologue NFT will have a “base value” equal to that of its Prologue Position. You can think of the corresponding Prologue Position as the effective “floor price” of your Prologue NFT.

Prologue Loans

On the Spice Protocol, ONLY PROLOGUE HOLDERS will be able to take out loans against the “floor price” of their Prologue NFT.
Example:
A user deposits 10 $ETH & “mint” a rare Prologue NFT at the end of the Prologue Playoff.
The user's effective floor price of their Prologue NFT is ~10 $ETH. Meaning there is a 10 $ETH deposit linked to that NFT.
Users will then have access to the Loans & Leverage page on Spice’s dApp!
On the Loans & Leverage page, the Spice Protocol allows users to take out loans at: ~60% LTV against their Prologue NFT.
Leverage will come from a separate Prologue Leverage Vault on the Spice dApp where users can choose to lend against Prologue NFTs against a set of parameters determined by the community.

Prologue Leverage & Looping

Keeping with the example, the original user can take out an 6 $ETH loan (60% LTV). That loan will automatically loop $ETH back into their Prologue Position.
The Prologue position is now 16 $ETH, augmenting yield and bolstering the floor price of the NFT.
Note: Augmented yield is only positive if the Prologue Vault yield is greater than the borrowing costs from the Prologue Leverage Vault. Augmented yield can be less than original yield if Prologue Vault yield is less than Prologue Leverage Costs.
Users have the ability to do this again.. And again.. (but only while maintaining a 60% LTV limit throughout the whole time).
Loop 2: Loan 2 = (16 ETH * 60%) - 6 ETH = 3.6 ETH
Loop 3: Loan 3 = (19.6 ETH * 60%) - 9.6 ETH = 2.16 ETH
etc.

Liquidation

Prologue holders who take out Prologue Leverage can be liquidated if the total loans taken out is greater than the ETH in Prologue Position multiplied by the liquidation LTV.

Disclaimer

  • Specific Prologue Loan and Leverage details are subject to change before launch.