Registration and Platform Access
Am I eligible for a loan?
As soon as you have passed onboarding procedure you may get a loan on the Nitrogen network.
Since each loan on the Nitrogen network is secured with overcollateralization, we assume that when collateral is settled to the smart contract you automatically meet eligibility requirements.
How do I get access to the platform?
You may already experience the full functionality of the platform at https://platform.nitrogen.network
First you will need to register on the platform using your email or with a social network account. We will ask you to confirm your email by sending you a welcoming confirmation notification. In addition to email confirmation you will need to confirm your Ethereum address by signing a confirmation transaction within your MetaMask wallet. Our platform and smart contracts work only with whitelisted addresses.
What countries is Nitrogen network available in?
Persons that are located in or a resident of the United States of America or Québec (Canada) are prohibited from holding positions or entering into contracts at Nitrogen Network. Persons that are located in or a resident of Cuba, Crimea and Sevastopol, Iran, Syria, North Korea and Sudan, or any other jurisdiction where the services offered by Nitrogen network are restricted, are prohibited from holding positions or entering into contracts at Nitrogen Network. Nitrogen network reserves the right to immediately close the accounts and to liquidate the open positions of persons determined to have breached our Terms of Service.
How do I become a borrower?
Once onboarded and whitelisted on the Nitrogen network, create new order for borrowing an asset you need and wait for counterparty to match it. Or go ahead and find a suitable loan offer among the offers in the funding book and accept it by participating in the new transaction.
What is whitelisting?
Whitelisting is a process of approving users' ETH addresses, so these addresses may communicate with Nitrogen smart contracts.
How do I become a whitelisted user?
You should pass the onboarding procedure to get whitelisted. First you will need to register on the Nitrogen network using your email or with a social network account. We will ask you to confirm your email by sending you a welcoming confirmation email. You will also need to sign a confirmation transaction within your Metamask wallet to confirm your Ethereum address. Nitrogen network and its smart contracts work only with whitelisted Ethereum addresses.
How much can I borrow?
The amount you can borrow depends on the value of the blockchain assets you have to pledge as collateral. Borrowing offered through the Nitrogen platform is always overcollateralized, which means that you can never borrow more than the value of the asset you post to the contract as collateral. Currently there are no hard caps set on the amount of assets you may borrow. Loan values and availability are subject to change at any time.
How quickly do I get my loan?
All blockchain-based loans are initiated the moment both counterparties (lender and borrower) agree to the loan terms, this means as soon as your order is matched and counterparty has settled the assets, or you match someone's order and settle assets to the smart contract from your side, you will receive your loan.
What is the minimum and maximum amount I can submit in an order?
Currently there are no minimum or maximum amounts set. However, be aware of applicable fees and make sure your commissions constitute a reasonably small fraction of your transaction value.
How do I submit a new order?
1. Go to "Create new order" form in the right part of the platform and select side: lend or borrow.
2. Select loan asset and its amount, specify desired annual interest rate.
3. If you want your order to match partially, select corresponding flag and set minimum loan value for partial matching.
4. Pick eligible collateral for your order and specify haircut (discount) on its value, make sure your initial haircut is greater than 23.5% for ETH and 32% for other ERC20 tokens.
5. You may specify collateral groups instead of particular collateral asset to increase the possibility of matching of your order. Currently we have implemented following groups: Liquid (ETH, BTC), Stable (USD, EUR, GBP), ERC-20 liquid (high liquid tokens), ERC-20 low liquid (low liquidity tokens).
6. Select desired maturity, order expiry, and decide if you want to terminate the trade automatically on borrower's default
Next, hit the Place New Order button and proceed with final steps of order creation and blockchain settlement.
That's it! You've successfully placed a new order!
What is partial matching?
When submitting an order user may specify if he wants to match order partially or in full. Partial matching means there can be several takers of one order, each taker will fill part of the order and eventually there will be many to one relationship between an order and corresponding trades.
For your order to match partially you need to specify the minimum amount for partial matching. This amount may be anywhere between 10% and 50% of the loan amount. These boundaries are set according to the following logic:
There should be some feasible minimum amount set, otherwise there is a risk that lender ends up with a lot of trades with different collateral assets. This could lead to inconvenience for the lender in case of possible defaults or margin calls on some of the many possible trades. Hence the 10% minimum.
Minimum amount for partial matching can not be greater than 50% because otherwise the remaining part of the order won't be matched. Consider an example: if user sets minimum amount to be 60%, one trade can take out 60% of the loan with 40% remaining in the order, in this case no one else will be able to fill the order completely as the minimum amount of 60% is greater than the remaining 40%.
If you want your order to match partially, select corresponding flag and set minimum loan value for partial matching:
What is multiple collateral?
As a lender you may specify collateral groups instead of particular collateral asset to increase the possibility of matching of your order.
Currently we have implemented following groups: Liquid (ETH, BTC), Stable (USD, EUR, GBP), ERC-20 liquid (high liquid tokens), ERC-20 low liquid (low liquidity tokens).
Collateral groups imply that any collateral may be chosen from that group when borrower accepts your order and creates a trade.
To select collateral groups, navigate to the create new order sidebar and when selecting collateral assets as a lender select desired collateral groups:
After that hit OK button and specify initial haircut for each group, make sure your initial haircut is greater than 23.5% for liquid groups (Liquid, Stable, ERC-20 liquid) and 32% for other ERC20 tokens (ERC-20 low liquid group).
Trade Creation and Settlement
How do I create a trade?
1) Go to "Funding book" page and select the "Pick order from the market" tab
2) Select side: "Lend" or "Borrow" and use filters to find the order with desired parameters for your trade
3) Choose an order from the list and click "Lend" or "Borrow" button on the right side
4) Just like with order placement you will need to sign three distinct transactions: trade creation in the blockchain, approval of ERC20 asset transfer and asset settlement.
What can I do with my trade?
If you are a borrower you will have options to submit additional collateral or make a repayment of the loan principal and interest. If you are a lender you will have an option to call a default on a transaction if no auto-default flag was selected and the borrower missed the loan repayment. Both borrowers and lenders also have an ability to submit orders with the same parameters as their current trade.
How do I monitor my trades?
You can view all of your transactions and their respective states at the "My transactions" page under the trades tab.
What is a closeout?
There are several ways your trade may be closed out:
In most cases closeout occurs naturally at the maturity of the transaction. Borrower pays out the interest and the loan, and receives back the full collateral bar the applicable fees.
Smart Contract may close out your transaction automatically should the market value of the collateral fall significantly and become insufficient to cover the loan. Your collateral will be transferred to the counterparty to cover the loan amount and you will receive any excess collateral after the deduction of loan amount and any applicable fees.
If you are a borrower, your transaction may be closed out automatically should you default on your obligations (e.g. do not pay out the loan in time). In this case your collateral will be transferred to lender to cover the loan and the applicable interest and fees and you will receive any excess amount left.
How do I avoid forced closeout?
If you are a borrower, you should monitor your transactions closely to make sure that the current haircut on your collateral never falls below the critical haircut value. We have a system of checks and balances in place to help you avoid trade termination called maintenance haircut (analogous to maintenance margin in classical margin financing). This means that whenever the value of your collateral falls below maintenance haircut value the platform will notify you and may ask the counterparty to provide additional collateral to raise the current haircut value above the initial haircut.
Can I cancel my trade?
You may cancel your order if you want, which will cost you some gas since you will need to submit cancel transaction to the blockchain. You may not however cancel the trade due to the nature of digital currency protocols: transactions cannot be cancelled or altered after they have been initiated.
Mark to Market
What does haircut mean?
A haircut is the difference between the market value of a collateral asset and the market value (purchase price) of the loan asset. Haircut is expressed in percentage terms.
Haircut is a mean by which markets impose margin on lending transactions to protect lender from possible borrower default. For example, a haircut of 20% implies that for $100 of provided collateral the borrower will only receive $80 worth of the loan.
How are exchange rates benchmarked within Nitrogen?
Oraclize, CryptoCompare, related liability limitations.
Where does Nitrogen get its price feed?
Nitrogen network retrieves market data for haircut calculations and post-trade management (default, margin call, repayment) from CryptoCompare by calling its API through Oraclize.it. Currently pricing rates within smart contracts are periodically updated through calls to the contracts from our backend.
In no event will Nitrogen be liable for any loss or damage including without limitation, indirect or consequential loss or damage, or any loss or damage whatsoever arising from loss of data or profits arising out of, or in connection with, the use of the CryptoCompare price feed.
How often does the Nitrogen "Mark-to-Market"?
The rates on all of the assets (both loan and collateral) listed on Nitrogen network are updated automatically every two hours and fetched via oraclize. These rates affect haircut levels of the borrower collateral and thus can be thought of as a mark to market procedure.
What is critical haircut?
Critical haircut defines the minimum market value the collateral asset may reach before the closeout procedure will be executed and lending transaction will be terminated.
What happens if the market value of my collateral asset changes?
If you are a borrower, you should monitor your transactions closely to make sure that the current haircut on your collateral never falls below the critical haircut value.
We have a system of checks and balances in place to help you avoid trade termination called maintenance haircut (analogous to maintenance margin in classical margin financing).
Whenever the value of your collateral falls below maintenance haircut value the system will notify you and will ask to provide additional collateral to raise the current haircut value above the initial haircut value.
What happens if I fail to repay my loan?
In this case smart contract will trigger a default event. Your collateral will be transferred to the counterparty to cover the loan amount and you will receive any excess collateral after application of the specific discount rate, the deduction of loan amount and any applicable fees.
How do I meet a margin call?
- Navigate to the relevant transaction where you are participating as a borrower:
2. Click "settle additional collateral" button.
- Make sure to settle enough assets to raise your current haircut above the maintenance margin levels, which are currently 23.5% for ETH and 32% for other ERC20 assets.
- Click Settle button and proceed with asset settlement to blockchain
How do I repay my loan?
It's simple, just log on to the Nitrogen platform, select corresponding transaction, and make repayment of your loan using your MetaMask wallet.
What is the loan repayment schedule?
There is currently no option for periodic repayments. Borrower returns loan and interest as a lump sum at the maturity of the lending agreement.
About the Company
What is Nitrogen network?
Nitrogen is a decentralized peer-to-peer lending network based on the top of Ethereum blockchain. It provides an opportunity for a range of market participants to generate income, liquidity, or hedge their risks, and take varied investment views on the cryptocurrency market.
How is Nitrogen service different from a margin account on an exchange?
Margin trading on the exchange is essentially trading with borrowed funds instead of your own. When you place a margin order, all of the money you are using is borrowed from other users offering their funds as peer-to-peer loans on the exchange.
The funds in your margin account are used only as collateral for these loans and to settle debts to lenders. Because all the traditional exchanges are centralized, they control their risks and net exposure internally and thus are able set a leverage, i.e. allow you to post margin amount smaller than the amount of funds you are borrowing.
With Nitrogen borrower's collateral is stored in a decentralized manner in an ethereum smart contract, significantly reducing counterparty risk. There amount of loan is always covered in redundancy by the supplied collateral, so there is no leverage as on traditional centralized exchanges.
Why should I use Nitrogen service?
1. Nitrogen network is secure. Only approved Ethereum addresses may interact with Nitrogen smart contracts.
2. Nitrogen network provides a wide range of assets for users to lend or borrow. Currently these assets are limited to ERC20 tokens and Ether, but we are testing solution with stable coins for fiat and other blockchains such as BTC, EOS and other blockchains which support scripting. We are constantly working closely with different Ethereum-based projects to get their tokens listed on our Network.
3. Nitrogen Network implements automated functionality of loan overcollaterization and borrowers auto-default procedure, leading to full protection of Lenders in the event of borrower's default or margin call.
Does Nitrogen provide loans?
Nitrogen is the peer-to-peer network, therefore we don't provide loans ourselves. Nitrogen is intending to become a liquidity provider to the market and puts a lot of effort to engage initial market makers to get onboarded on the platform to supply liquidity in ERC-20 and ETH both from lending and borrowing side.
Technology and Security
On what blockchain is Nitrogen network built?
Nitrogen smart contract operates on ethereum blockchain. All orders and loan transactions are recorded in the smart contract.
How does the Nitrogen network interact with the blockchain?
All Nitrogen in-platform calculations, user order matching and post trade management are performed in the ethereum blockchain. Nitrogen web application is an user interface wrapper around blockchain smart contract methods.
Can I interact directly with ethereum smart contrcats?
Yes you can! But your Ethereum address still needs to be whitelisted and you have to be a registered user of our services.
Users can interact with smart contracts directly via Parity, MyEtherWallet or any other blockchain interface. But you should be aware it is a cumbersome and complicated process even for advanced blockchain users, this is why we’ve developed a web application https://platfrom.nitrogen.network for our clients to have a nice and simple user experience when submitting loan orders or participating in loan transactions.
What if the software fails? Does Nitrogen have multiple servers?
Our web application uses global server redundancy to protect the system from possible fails. Moreover, the blockchain part of our system is a stand-alone architecture which relies in its operation entirely on the effectiveness and operability of Ethereum mainnet. You can always interact with the smart contracts of Nitrogen through any blockchain interface to perform business critical functions.
Can I borrow and lend Bitcoin or other currencies outside Ethereum?
Current version of Nitrogen is rolled out within Ethereum ecosystem and supports Ether & ERC20 tokens. We are working hard on our first cross chain solution built with the use of atomic swaps. It will allow to embrace BTC, EOS and other assets based on other blockchains which support scripting.
What address do I send my collateral asset to?
You will send your collateral asset to a unique smart-contract address within the ethereum blockchain. All the current contracts may be viewed via this page
Products and Services
What assets can I borrow?
Initially, loans will only be available in ERC20 tokens. However, we have ambitious plans to expand our product to include fiat currencies starting with USD and EUR via stable coin implementation. As soon as we complete development of cross chain solution based on atomic swaps there will be assets from other blockchains available, including Bitcoin, EOS etc.
What is the interest rate on my loan?
The interest rate charged on your loan will be set by the lender who contributes the capital. This rate is approved by you upon acceptance of the lending agreement and is fixed for whole period of your trade. The interest rate offered on Nitrogen network is subject to change and is influenced by market conditions, volatility and user behavior.
Can I refinance my loan?
At this time we do not offer refinancing options for any loans. There are no penalties associated with early repayment, however be aware that you will be subject to a full interest repayment even if you repay your loan early.
Are there any origination or prepayment fees?
Each fee has a variable (percentage) and a fixed component. The fixed part of each fee is nominated in Ether and is converted into the asset you are transferring.
Currently there are four basic service fees:
- Trade arrangement fee. You pay this fee when you enter new trade on the network. 0 fee on inception!
- Spread fee. (Interest fee). If you are a lender you pay this fee calculated from the interest you earn from the trade. 0 fee on inception!
- Default fee. Borrowers pay this fee if they fail to repay the loan in time. You pay only our costs on inception!
- Margin call fee. Borrowers pay this fee if their collateral value falls below critical level and the trade is terminated. You pay only our costs on inception!
How does a Nitrogen loan work?
1. Lender or Borrower place an order, specifying an asset and loan terms (interest rate, maturity, collateral and LTV). Upon order creation lender settles loan asset or borrower settles collateral to the smart contract.
2. As soon as counterparty matches an order the loan transaction is initiated. Lender's asset is transferred straight to borrower, borrower's collateral is stored in the smart contract until the trade maturity.
3. At the trade maturity if borrower pays out loan and interest in full, his collateral is returned to his wallet automatically.
What assets may I use as a collateral?
In order for an asset to be used as collateral on the Nitrogen network it must be a Ethereum-based asset (ERC20 token or Ether). Having said we are working on cross chain solution based on atomic swaps which will allow to pledge BTC, EOS and assets from other blockchains which support scripting. Digital assets will be onboarded based off community demand. Please email email@example.com to request the onboarding of a new asset class.