Themis Network

Themis Protocol is a decentralized finance (DeFi) protocol operating on Layer 2 solutions, which provides collateralized lending of non-fungible tokens (NFTs) based on historical transaction data. The platform is built on a set of smart contracts that allow users to engage in the ecosystem based on their individual risk appetite, earning yields accordingly. Themis enables participants to lend, borrow, and auction assets, and notably, to leverage UNI-V3 liquidity positions. This functionality allows liquidity providers to use their positions as collateral to borrow stablecoins.

The protocol functions as a peer-to-peer lending mechanism, compliant with ERC-721 and ERC-1155 token standards, and supports multiple blockchain environments. When a lender deposits assets into the platform's lending pool, Themis creates a corresponding amount of tToken tokens on a 1:1 basis to represent the lender's assets. Borrowers can then secure loans against their NFTs. The core of the model is ensuring that the collateral's value exceeds the loan amount, with liquidation processes in place to protect lenders' principal and interest if a borrower is unable to repay. The business model aims to provide more efficient peer-to-pool lending compared to direct peer-to-peer agreements, which can suffer from information asymmetry and high costs in a decentralized setting.

The project has also been described as a decentralized exchange (DEX) running on the Sei Network, using an automated market-making (AMM) model similar to Uniswap and featuring a native governance token. It has also been associated with the Filecoin ecosystem, offering a suite of products including a decentralized spot and derivatives trading platform (Themis Pro), an AMM exchange (Themis Swap), a liquidity staking protocol (Themis Pool), and a stablecoin minted by staking FIL (Themis Stablecoin). The protocol experienced an exploit in June 2023 on the Arbitrum One chain due to a price oracle vulnerability, which resulted in a loss of approximately $370,000. In response, the team announced plans to absorb the bad debt and compensate affected users.

Keywords: decentralized finance, DeFi, NFT lending, crypto lending, collateralized borrowing, peer-to-peer lending, smart contracts, liquidity provider, UNI-V3, stablecoins, decentralized exchange, automated market maker, blockchain protocol, asset management, crypto trading, Arbitrum, Filecoin, Sei Network, ERC-721, ERC-1155