Borrowing and Lending With Flow NFTs: An Introduction to Flowty

Borrowing and Lending With Flow NFTs: An Introduction to Flowty

The intersection of decentralized finance and NFTs is innovating rapidly, with new technologies and protocols available to consumers every day. Continuing that trend,, a platform that allows users to borrow or lend against NFTs on the Flow blockchain has recently announced the launch of their beta platform. The platform is open to the public for borrowing and lending. Below we'll introduce Flowty and share how you can get started borrowing or generating passive income by funding NFT collateralized loans! 


What Is Flowty? 

Flowty is a decentralized lending platform that utilizes peer-to-peer loans collateralized with NFTs on Flow blockchain. At present time, hopeful borrowers can only participate by putting up Legendary NBA Top Shot Moments as collateral, though in the near future Flowty expects to expand to other Flow-based NFTs. 

Much like traditional investment assets can be used in a variety of ways, like borrowed or lended against, Flowty’s goal is to unlock utility within NFTs on Flow and help them become more versatile financial instruments to market participants. 


Who Is Flowty Built For? 

The Flowty platform is designed to offer services to NFT collectors on the Flow blockchain who may be in need of borrowing or lending services. Below we'll detail why individuals may wish to borrow or lend on Flowty's platform. 


Borrowers, or those seeking short term loans, are able to create a loan to the details of their liking, backing or collateralizing their borrow amount with a Legendary NBA Top Shot Moment. 

A borrower may wish to borrow utilizing Flowty’s platform to unlock liquidity or capital for use in the short-term for a variety of reasons like the illiquidity of the high-end NBA Top Shot market or to hedge their portfolio. 

In addition to these use cases, Flowty has outlined a variety of others as reasons that borrowers may look to utilize their platform:


  • Expectation of future price appreciation
  • Desire to retain membership in a group or community
  • Sentimental value
  • Defer capital gains


For more information on each of these potential use cases, refer to Flowty’s “Use Cases For Borrowers.” 


On the other hand, willing lenders may be looking to utilize Flowty’s platform to generate passive income. Lenders can accept the loan offerings set by hopeful borrowers, and provide the capital being requested. 

Lenders will then receive interest on their loan (pursuant to the interest rate set by the borrower) and in the event the borrower does not pay back their loan, the lender will receive the Legendary Top Shot Moment that was put up as collateral. 

Because loan listings are created by peers, inefficient listings may create opportunities for savvy lenders to generate passive income at interest rates not typically available in traditional markets. 

Flowty has outlined a handful of potential strategies for Lenders here.  These strategies expand beyond the typical passive income generation and dive into the potential for "loan to own," funding loans that are unlikely to be repaid appropriately, allowing lenders to own the underlying asset. To put these strategies in place, please keep reading to learn how to use the Flowty platform. 

How Do I Use Flowty? 

As a decentralized lending platform, Flowty has created a marketplace for hopeful borrowers or lenders to build their own loan offerings, but they do not create the loans or modify them in any way. Therefore, it is up to the borrowing or lending party to make all decisions regarding the loan offerings they create or fulfill. 

Prior to becoming a borrower or lender though, users must first read Flowty’s terms of service, connect a Blocto wallet, and save an email address to associate with their account. An email account is required for the purpose of receiving notifications on the platform. Those unfamiliar with Blocto can refer to this documentation to learn more. (

After following the aforementioned steps, users can jump into borrowing or lending. 

Using Flowty: Borrowers

With a Blocto wallet connected to the site, hopeful borrowers can begin the process of generating a loan listing in just a few simple steps. The Flowty Primer holds an even more thoroughly detailed step-by-step instruction guide. 

  1. Navigate to the marketplace and click “new listing.” 
  2. Select desired collateral. 
  3. Input desired loan terms.
  4. Pay $1 listing fee and submit your listing to the marketplace.**

** To celebrate the launch of the platform, Flowty is waiving all $1 listing fees for the time being. The team has not provided a timeline for when listing fees may be enforced. 



It is important to note, that at the time of writing only Legendary NBA Top Shot Moments are eligible for use as collateral on Flowty. NBA Top Shot collectors that hold Legendary Moments transfer those moments to their Blocto wallet for usage on Flowty's platform. 

After submitting a listing to the marketplace, borrowers are given five minutes to verify the information they’ve submitted is to their liking. This grace period allows borrowers to correct for any typos or errors submitted during the listing process. 

Once the grace period has ended, the listing is active in the Flowty marketplace. By default, all marketplace listings are active for 30 days. Therefore, if a listing is not funded or delisted by the user their listing will automatically expire at the end of 30 days. Additionally listings are removed from the market place when delisted or funded by a lender. 


Using Flowty: Lenders

Lending on the Flowty platform requires even fewer steps! After connecting a funded Blocto wallet to the site, users can scan the marketplace for listings that are suitable for them to provide funding for. 

Once an agreeable listing is found, simply clicking the listing and selecting “fund” will kickstart the lending process. Users will be required to approve the transaction in their Blocto wallet, but after doing so the loan will be funded. 





After the loan is funded, the collateral (in this case the Legendary NBA Top Shot Moment) is automatically transferred into Flowty’s smart contracts while the lending sum is transferred to the borrower, less Flowty’s fee and the creator royalty.

What Are Flowty’s Fees? 

Participants on the Flowty platform are subject to fees at the time of listing and funding of loans. 

These fees are transparently broken down in Flowty’s “Overview on Fees,” which can be accessed here

There are three different fee types: a listing fee, a transaction fee, and a collection royalty fee (not a fee paid to Flowty). 

Listing Fee 

In the future, hopeful borrowers seeking a loan must pay a $1 fee to have their listing placed in the Flowty marketplace. This $1 fee will be required for each listing submitted to the marketplace. However, for the time being all listing fees are being waved by the Flowty team. The team has not indicated when the listing fee may be enforced in the future.**

Transaction Fee

At the time of funding a transaction fee is assessed equal to 10% of the Borrower’s interest on the loan. 

Collection Royalty Fee 

To support creators, Flowty has ensured that creator royalties can be paid when a particular collection is borrowed against on their platform. 

As such, creators have the opportunity to set a royalty percentage for their assets on the platform. This fee is also collected at the time of funding, but is never held or maintained by Flowty. Instead, it is sent to escrow at funding, and is repaid to the lender at the time the loan is repaid in full. If the loan is not repaid in full, the creator royalty fee is dispersed to the creator of the collateral asset. 

Flowty has provided a few examples of the fee breakdown from both the borrower and lender perspective. 



How Do I Know How to Price My Listing? 

Borrowers and lenders are solely responsible for creating listings or funding loans on the platform. However, with the fluctuations in NFT asset valuations it may be difficult to properly assess the appropriateness of a listing. 

Though Flowty will not suggest listings to a user, they have provided a thorough breakdown of items that may be worthwhile to consider when trying to assess or value a loan’s price on the marketplace.

Additionally, users can refer to the marketplace activity feed on to get a general sense for loans which are being funded and their respective rates and durations. (link) 

As more and more data is gathered and the Flowty marketplace and NFTs on Flow mature, better loan pricing analysis is expected to be accessible for users. 

What Are the Risks of Using Flowty? 

All participants assume general risks, and risks specific to both buying and lending when using the Flowty platform to receive funding or generate passive income. 

Flowty has written an extensive post detailing and outlining these risks, but we’ve broken down a few notables below. 

General Risks

Risks assumed by both borrowers and lenders that are not specific to Flowty, but web3 more broadly include: volatility of cryptocurrencies, smart contract risk, regulatory risks, and general market risks associated with illiquid assets like NFTs. 

Borrower Risks

Borrowers assume the risk of losing their collateral NFT when seeking to have a listing funded on the Flowty platform. In any case where a borrower does not pay back the loan on time, has insufficient funding to pay the loan, or loses access to their account, the borrower will lose their NFT which was put up as collateral in the event they could not pay back the loan. 

Lender Risks

Lenders also assume specific risks when providing funding for a loan listing on Flowty’s platform. For example, lenders may need access to funds they had provided during the course of the loan payback period, borrowers may not repay the loan in full giving the lender an NFT instead of the digital asset they initially provided, or the value of the collateral NFT may decrease significantly during loan period disincentivizing borrowers to pay back their loan, sticking the lender with an NFT less valuable than the initial funding amount. 


Disclaimer: The author or members of the Lucky Trader staff may own NFTs discussed in this post. Furthermore, the information contained on this website or the Lucky Trader mobile application is not intended as, and shall not be understood or construed as financial advice. AI may have assisted in the creation of this content.