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The following is a non-comprehensive list of risks that a Borrower should consider before and when interacting with flowty
- 1.Insufficient funds to repay a loan leading to loss of collateral (NFT)
- We encourage Borrowers to only borrow an amount that can be repaid comfortably.
- Please have a plan to ensure that you have the necessary capital to repay your loan.
- A cycle of taking out additional loans to pay off previous ones can spiral out of control and may not be dependable, given a peer will have to fund a new loan for you each time, which is not guaranteed.
- 2.Borrower forgets to repay before loan maturity
- We require an email address to be saved to your user profile to ensure that our reminders and notifications are received by Borrowers.
- Subject to any technical issues, we will send several notifications before a loan's maturity.
- Please always monitor your outstanding loans and do not solely rely on Flowty's notifications.
- 3.Borrower loses access to an account with outstanding loans
- During the listing process, Borrowers can opt in for Auto Repayment, which will automatically repay a loan for you if you have a sufficient balance in your wallet at loan expiration.
- We advise all users to create an account backup plan to ensure access to their account under any scenario.
- Blocto is a user-friendly wallet, but there are certainly situations in which individuals can lose access to their wallet.
- Have a contingency plan with a trusted friend or family member should you lose access to your wallet
- 4.Technical or logistical issues that prevent timely repayment (resulting in a default and a loss of collateral)
- We highly recommend that Borrowers pay back loans as soon as they have the means to do so.
- Many of the risks that we have outlined can be avoided by not waiting until the last minute to repay a loan.
- To the extent possible, we will provide advanced notice for any events affecting the Marketplace, including but not limited to: issues with Flow blockchain, Blocto, or the Flowty platform.
- 5.Unanticipated need to have the NFT in your wallet during the loan term (TopShot Challenge, Airdrops, Community Events, etc)
- We encourage careful planning to ensure the NFT will not be needed during a loan.
- Should there be an unexpected need to regain control of your NFT, repaying the loan early is the only way to reclaim your NFT
- Please note that repaying a loan early will not reduce the interest owed to the Lender.