CollaFi Whitepaper

Introduction

CollaFi is a peer-to-peer NFT lending and borrowing platform built for Hedera. It was created to unlock liquidity held in NFT collections across the ecosystem.

NFT holders have traditionally faced a binary choice: retain the asset without accessing its value, or sell it and give up its future utility and potential upside. CollaFi provides a third option by allowing supported NFTs to secure short-term HBAR loans.

At the same time, HBAR holders can fund those loans and receive either principal plus interest after repayment or the NFT collateral after default.

Mission: Make NFT-backed liquidity accessible, transparent, and understandable for participants in the Hedera ecosystem.

CollaFi stands for Collateralized Finance, reflecting the platform's central function: using NFTs as collateral for HBAR loans.

The problem

NFTs on Hedera can represent art, membership, game assets, founder access, and other forms of digital ownership. Despite that value, holders have limited options when they need liquidity:

• Selling permanently transfers the asset and its associated rights or utility.
• Informal over-the-counter loans rely heavily on trust and may lack clear settlement rules.
• Limited NFT lending infrastructure leaves few structured alternatives.

HBAR holders also have limited yield opportunities secured by identifiable on-chain collateral.

The solution

CollaFi provides a marketplace for direct loan offers between lenders and borrowers. There are no algorithmic loan-pricing pools and no protocol-owned lending vaults.

Borrower benefits

• Borrow HBAR without selling the NFT.
• Choose among offers available for the NFT's collection.
• Use the NFT itself as collateral without a conventional credit check.
• Review the principal, fees, interest, and deadline before approval.
• Recover the NFT after a successful repayment.

Lender benefits

• Fund loans backed by NFT collateral held in escrow.
• Choose the principal amount offered against a collection.
• Create up to 10 offers through a bulk flow.
• Receive principal and interest after repayment.
• Become eligible to claim the NFT after default.

Neither outcome is risk-free. Interest does not guarantee profit, and an NFT received after default may be worth less than the principal.

How lending works

1. Create offers

The lender selects a supported collection and chooses the amount of HBAR to offer. The platform displays the offer fee, interest breakdown, total approval, and expected return before wallet approval.

2. Build collection liquidity

Open offers form the collection's available lending liquidity. Borrowers can compare eligible offers and choose one to accept.

3. Offer acceptance

When a borrower accepts an offer, it becomes an active loan. The borrower's NFT moves to CollaFi-controlled escrow and the borrower receives the principal, less the acceptance fee.

4. Repayment or default

• If repaid, the lender can claim the principal and lender interest.
• If defaulted, the lender can pay the applicable claim fee and claim the NFT.

How borrowing works

Instant Loan

My NFTs shows supported NFTs held by the connected account. Instant Loan selects the highest eligible collection offer and presents its complete terms for approval.

Manual offer selection

A borrower can instead open a collection, compare available offers, and select a specific offer and NFT.

Escrow and payment

Collateral transfer and HBAR payment are handled as distinct Hedera transactions. Once both have settled and the loan is recorded, the loan appears in Portfolio.

Repayment

The borrower pays the principal plus the total agreed interest before the deadline. After successful settlement, the NFT is returned to the borrower.

The borrower account must remain associated with the NFT's token so it can receive the NFT.

Default

The loan term is seven days and has no grace period. If the deadline passes without repayment, the lender becomes eligible to claim the NFT.

Platform architecture

CollaFi uses native Hedera services and SDK transactions rather than deploying custom lending smart contracts.

Hedera Token Service and account operations

Native Hedera transactions handle:

• HBAR transfers.
• NFT transfers.
• Account allowances.
• Token associations.
• Collateral custody and return.
• Reward NFT transfers.

Consensus and transaction records

Hedera transaction IDs, receipts, timestamps, and network records provide the basis for settlement and auditability. Platform records maintain the application state required to present offers, loans, claims, rewards, and analytics.

Why Hedera?

• Predictable network fees.
• Fast consensus finality.
• Native token and NFT functionality.
• A public record of transactions.
• Energy-efficient network operation.

Fee structure

CollaFi fees support operation, development, security, marketing, and reserves.

Transaction	Fee	Charged to
Offer creation	2-5 HBAR per offer	Lender
Loan acceptance	1.75% of principal	Borrower
Lender interest	Commonly 3%-6% of principal	Included in repayment
Platform interest	Commonly 1%-2% of principal	Included in repayment
Default claim, principal up to 500 HBAR	5 HBAR	Lender
Default claim, principal 501-1,000 HBAR	10 HBAR	Lender
Default claim, principal 1,001-1,500 HBAR	15 HBAR	Lender
Default claim, principal 1,501 HBAR or more	20 HBAR	Lender

Collection settings may differ. The live transaction confirmation displays the terms that apply to that transaction.

Interest split

Each collection has one total borrower interest rate. The lender receives a configured portion, and CollaFi receives platform interest. A configured portion of platform interest may also be allocated to a project's treasury.

The split is handled by the platform; the borrower approves one total repayment amount.

Supported collections

CollaFi adds Hedera NFT collections that are suitable for collateralized lending.

Review considerations can include:

• Floor price and trading volume.
• Market liquidity.
• Active holders and community participation.
• Ongoing project development.
• Collaboration with the collection team.

Each enabled collection can display market information, available liquidity, the best loan offer, project links, and collection imagery. Collections can also appear in featured and recently added sections.

The standard interface uses collection-level offers. Trait-specific and rarity-specific loans are not currently part of the normal flow.

Wallet and marketplace integrations

Wallets

• HashPack.
• WalletConnect-compatible wallets.

Marketplaces and market data

CollaFi can use third-party marketplace APIs such as SentX to display floor prices and instant-sell information. These values are informational, can be delayed, and do not guarantee executable prices.

NFT metadata and media

NFT identity and metadata begin with Hedera network records. Off-chain metadata and images may be resolved through IPFS gateways, CDNs, or HTTPS sources. Availability depends on those external systems.

Platform features

Profiles

Users can set a public username, optional verified email, and optional profile image. Notification preferences control which enabled channels receive each type of communication.

Portfolio

Portfolio separates lending and borrowing activity and displays open offers, active loans, claimable repayments, defaulted collateral, completed loans, dates, amounts, and performance information.

Points and leaderboard

Eligible actions award points under rules configured by CollaFi. The leaderboard ranks accounts by points earned within selectable timeframes.

Points:

• Are tied to the earning account.
• Are not transferable or tradeable.
• Carry no monetary value.
• Do not expire solely because time passes.
• Can be adjusted or revoked in response to abuse, manipulation, or errors.

Rewards

Available NFT rewards can be claimed with points. Each reward has an inventory item and points cost. Availability is limited and may change at any time.

Notifications

Users can receive eligible account notifications in-platform and, after connecting a channel, by email or Discord. Third-party delivery can fail, so users must monitor Portfolio directly.

Loan countdown

Each active borrowing position displays a countdown to its deadline. The countdown is based on stored timestamps and continues regardless of whether the website is open or under maintenance.

Support

• In-platform support chat.
• Discord tickets.
• Email support for general or partnership inquiries.

Security and risk

CollaFi's use of native Hedera transactions avoids custom lending-contract risk, but the platform still has technical, operational, custody, market, and third-party dependencies.

Material risks include:

• NFT price volatility and limited liquidity.
• Borrower default and irreversible collateral loss.
• No platform-enforced maximum LTV.
• Custody of active collateral in CollaFi-controlled accounts.
• Key compromise or loss.
• Infrastructure, wallet, Mirror Node, marketplace, metadata, notification, or network failures.
• User mistakes, phishing, and approval of incorrect transactions.
• Evolving regulation.
• Modification or discontinuation of points and rewards.

Read the complete Risk Documentation before using the platform.

Roadmap

Phase	Work	Source status
Foundation	Concept, brand, design, and architecture	Completed
Development	Native Hedera transaction flows and product UI	Completed
Testing	Testnet loan lifecycle, escrow, fees, and integrations	Completed
Mainnet testing	Validation with live network transactions	Completed
Pre-launch	Documentation, community, and project partnerships	Completed
Mainnet launch	Public platform launch and initial collections	In progress
Growth	More collections, iterative features, and increased volume	Upcoming

Revenue and allocation

Platform fees and platform interest sustain CollaFi operations. The source whitepaper presents this initial allocation framework:

Category	Allocation	Purpose
Operations and costs	45%	Infrastructure, hosting, and team compensation
Maintenance and development	25%	Development, fixes, and new features
Marketing	20%	Community growth, campaigns, and partnerships
Reserves	10%	Emergencies and future opportunities

This allocation is an initial framework and may be adjusted according to operational needs and market conditions.

Team

CollaFi is a product of W3B Studio.

• Wis3m4n: Founder
• Augustine: Developer / CTO
• N0n Fung1bull: Marketing and Communications Manager
• Alvaro: Community Manager

Legal disclaimer

Not financial advice

This whitepaper is informational and does not constitute financial, investment, legal, or tax advice. CollaFi does not recommend a specific lending or borrowing decision.

Risk of loss

Users can lose HBAR, NFT collateral, rewards, or access to assets. Past collection performance does not indicate future results.

No guarantees

CollaFi does not guarantee returns, platform availability, asset prices, security, or recovery after a loss.

Regulatory responsibility

Users are responsible for compliance with the laws and regulations that apply in their jurisdiction.

Rewards

Points are non-transferable, non-tradeable, and have no monetary value. Reward inventory is provided as available. CollaFi may change, suspend, or end the program and may revoke points connected to abuse or manipulation.

Changes

CollaFi may modify platform features, collection availability, fees, points rules, and terms. Material changes may be communicated through official channels.