Updated on May 27, 2022
Introduction
The following is a comprehensive overview of all applicable fees and collection royalties on the flowty platform. This post is subject to change and will be updated as needed. Any change to our fee structure will be accompanied by an announcement in our Discord.
Fee Overview (Loans)
Listing Fee
NOTE: the listing fee has been waived until further notice
Each time a Borrower adds a new loan listing to the flowty Marketplace, a fee of $1 will be assessed. As of now, users cannot edit listings, though we are currently evaluating an edit feature.
Transaction Fee
When a Lender funds a listing, a transaction fee will be assessed. The transaction fee will be calculated as a percentage (10%) of the Borrower’s interest on a loan and will be assessed at the time of funding.
Collection Royalty on Loan Default (Not a Flowty Fee)
Flowty supports community creators and builders. As such, we have built our platform in a way that ensures secondary royalties are honored on flowty. The following outlines the process:
- When a loan is funded by a Lender, a collection royalty (royalty percentage is set by the creator) is collected and set aside in trustless escrow (not in flowty’s custody)
- If a loan is repaid by the Borrower (no transfer of ownership of underlying collateral), the royalty is returned to Lender
- If a Borrower defaults (ownership of collateral is transferred to Lender), the royalty is sent directly to the creator of the collection
- At no point does flowty have custody or control of the royalty
- Flowty does not profit in any way from the royalty
The following examples may be helpful:
Notes:
- Collection royalty is collected as part of the initial loan funding and is returned in full to Lenders if a loan is repaid by a Borrower (no transfer of ownership)
- Flowty never takes custody of collection royalties — they are either returned to Lenders (repayment scenario) or sent directly to creators (default scenario)
- APR is calculated as (365/Duration * Rate)
- If a Borrower defaults (does not repay), the Lender receives the underlying collateral in lieu of a repayment
- The Borrower receives the loan amount as seen in the Marketplace net of flowty’s transaction fee and collection royalty
- Marketplace listings are presented from the Lender’s perspective (Borrower sees different metrics when adding a new listing to the Marketplace; see table above for detail)
- The Borrower’s loan rate paid is higher than the loan rate in the Marketplace (the loan rate received by Lenders) because the Borrower receives funds net of the flowty transaction fee and collection royalty
- The transaction fee is assessed at the time a listing is funded and is not contingent on a Borrower repaying (rather than defaulting on) a loan
Fee Overview (Rentals)
Listing Fee
NOTE: the listing fee has been waived until further notice
Each time an Owner adds a new rental listing to the flowty Marketplace, a fee of $1 will be assessed. As of now, users cannot edit listings, though we are currently evaluating an edit feature.
Rental Fee Split
When a Renter rents an NFT from the flowty Marketplace, a rental fee is collected. The rental fee is split three ways: i) Owner share (significant majority), ii) flowty fee and iii) royalty. The flowty fee is set at 5% of the rental fee from the listing. The royalty is variable and set by the issuer / creator of the NFT. The remainder is sent to the Owner.
The flowty fee and the royalty tied to the rental fee are paid as part of the initial rental and are agnostic of whether the rented NFT is returned.
There are examples below to help illustrate the mechanics of the fee.
Collection Royalty on Rental Default (Not a Flowty Fee)
There are two components of royalties on flowty rentals:
- a share of the rental fee (discussed in the previous section)
- a share of the Refundable Deposit if and only if a Renter defaults (does not return the rented NFT)
Flowty supports community creators and builders. As such, we have built our platform in a way that ensures secondary royalties are honored on flowty, especially when there is a permanent transfer of ownership. The following outlines the process for Refundable Deposits and how royalties come into play:
- When an NFT is rented by a Renter, a refundable deposit is collected and set aside in trustless escrow (not in flowty’s custody)
- If a rental is returned by the Renter, the refundable deposit is returned to the Renter
- If a Renter defaults (does not return the rented NFT before the end of the rental term), the refundable deposit is split between the NFT issuer / creator (at a variable royalty rate set by the creator) and the Owner
- At no point does flowty have custody or control of the refundable deposit
- Flowty does not profit in any way from the royalty
The following examples may be helpful:
Notes:
- Refundable Deposit is collected as part of the initial rental and is returned in full to Renters if a rented NFT is returned by a Renter
- Flowty never takes custody of Refundable Deposits — they are either returned to Renters (returned NFT scenario) or split between Owners and NFT creators (if Renter defaults — NFT is not returned)
Questions?
Please feel free to contact us with any questions regarding the calculation of our fees
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