# NFT Valuations

The first problem faced by any NFT lending platform is figuring out how to value the NFT’s that they accept as collateral. Typically, existing solutions to this problem either (i) rely on price oracles that are vulnerable to market manipulation leading to chaotic liquidation cascades, or (ii) involve isolated peer to peer lending pools that lead to fragmented liquidity and exorbitant interest rates for borrowers. Goldilend aims to avoid this problem by capitalising on the fact that the value of the Berachain ecosystem is intimately connected to the value of the Bong Bear (and rebase) NFT’s. This observation allows the platform to determine a fair minimum value of the NFT’s (denominated in iBGT) that can be used to establish a unified and highly liquid lending market that doesn’t rely on price oracles.

Specifically, Goldilend will allow LOCKS holders to vote on an initial minimum fair valuation of each NFT collection in the Bong Bear series (Bong, Bond, Boo, Baby, Band, Bit) denominated in. These valuations should be well below both the current floor prices of the NFT’s at launch and the values of their (possible) respective airdrops. Because the loans are denominated in iBGT, the only situation in which the value of the capital loaned out by the platform would surpass the value of the collateral of those loans is one where the value of the iBGT token increases by many multiples against the value of the Bong Bear (and rebase) NFT’s. Given the central role that the NFT’s play in the Berachain ecosystem and the highly conservative initial valuations that employed by Goldilend, this is unlikely (since it would entail the NFT’s failing to capture a meaningful share of the ecosystem), but is still possible, and the risk should be countenanced by users of the platform. In this unlikely event, the DAO can vote to compensate GiBGT holders via further PORRIDGE emissions, effectively using PORRIDGE to purchase the NFT at the price of the outstanding debt.

Over time, Goldilocks DAO can vote to further adjust the implied valuations of the NFT's in response to changing market conditions.

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