Lending for NFTs: Explained
JewelSwap needs lenders to deposit EGLD into the lending pool, in order to offer NFT Loans and NFT Mortgages to borrowers. Let's go over how lending works from a user's perspective.
Lenders will receive attractive APY for lending their EGLD to borrowers that use the NFT Loans or NFT Mortgage feature. Rewards are being collected for 30 days (known as an epoch) and paid out after the epoch ended. After the epoch ended, lenders will receive their relative share of the generated rewards. The user can choose to either compound (also known as reinvest) his rewards, or claim/withdraw the earned EGLD.
The shown APY on the Website is calculated based on the rewards accumulated during the epoch.
Because the rewards are only distributed after the end of the epoch, it is important to note that the lender has to stay in the lending pool until the epoch has ended. Otherwise, the lender will not receive any rewards for the ongoing epoch.
Furthermore, once you deposit EGLD into the lending pool, your deposit is subject to a 21 days lock. If you deposit any amount of EGLD, you cannot withdraw those EGLD for 21 days. After the 21 days passed, you can withdraw them at anytime, but be aware, withdrawing your deposit before the end of the epoch means you will earn no rewards for this epoch.
Compounding/Reinvesting your EGLD rewards will not reset the lock, but depositing more EGLD will reset the lock.
If you want to learn more about the risks involved in lending your EGLD for NFT Loans and NFT Mortgages, you should also read the other pages in the documentation. By understanding how NFT Loans/Mortgages work, you can assess the risk for yourself.