Pawn / Lending Terms
Terms and conditions governing the Phygitals pawn and lending service, including loan amounts, interest rates, redemption, and forfeiture policies.
Overview
These Pawn & Lending Terms ("Pawn Terms") are entered into between you and Phygitals, Inc., a Delaware corporation with its principal office at 1111B S Governors Ave STE 34931, Dover, DE 19904 ("Phygitals"). These Pawn Terms are incorporated into and form part of the Phygitals Terms of Service. In the event of any conflict between these Pawn Terms and the Terms of Service, the Terms of Service shall control.
Phygitals offers a pawn and lending service that allows eligible users to borrow against the fair market value (FMV) of their collectible cards held in our vault. This service provides quick access to liquidity without requiring you to sell your assets. By utilizing our pawn service, you agree to the terms outlined on this page.
The pawn service is designed for users who want short-term access to funds while retaining the option to reclaim their items. All pawned items are securely stored in the Phygitals vault for the duration of the loan.
Jurisdictional availability: The pawn service is not available where prohibited by applicable law. The availability of the pawn service may vary or be restricted in certain jurisdictions where additional licensing or regulatory requirements apply. Phygitals reserves the right to limit the availability of the pawn service based on your jurisdiction of residence. It is your responsibility to determine whether the use of pawn or lending services is lawful in your jurisdiction.
Eligibility
To be eligible for the Phygitals pawn service, the following requirements must be met:
Logged-in account required: You must have a registered and authenticated Phygitals account. Guest accounts are not eligible for the pawn service.
Graded cards only: Only professionally graded collectible cards with a verified fair market value (FMV) are eligible for pawning. Ungraded cards, raw cards, and items without an established FMV cannot be used as collateral.
Card must be vaulted: The card you wish to pawn must already be held in the Phygitals vault. Cards that have not been submitted to or received by our vault are not eligible.
KYC may be required: Phygitals reserves the right to request identity verification (KYC) at any time before, during, or after the pawn process. See our KYC Policy for details.
Good standing: Your account must be in good standing with no outstanding violations of our Terms of Service.
How Pawning Works
The pawn process on Phygitals is straightforward:
Select an eligible card: From your vault, choose a graded card with an established FMV that you wish to pawn.
Choose a loan period: Select either a Weekly (7-day) or Monthly (30-day) loan term. Each term has different loan-to-value ratios and interest rates (see Sections 4 and 5 below).
Review the loan offer: Phygitals will present a loan offer showing the exact loan amount, interest rate, total repayment amount, and expiration date. Review all terms carefully before accepting.
Accept and sign: If you agree, confirm the pawn transaction by signing the on-chain transaction. This transfers the card to a secure pawn state on the Solana blockchain.
Receive funds: Once confirmed, the loan amount is credited to your Phygitals wallet balance in USDC.
Card is held as collateral: The pawned card remains securely stored in the Phygitals vault and is locked on-chain for the duration of the loan. You cannot sell, transfer, ship, or otherwise access the card while it is pawned.
Redeem or forfeit: You may redeem your card at any time before the loan term expires by repaying the loan principal plus interest. If you do not redeem before the loan term expires, the card is automatically forfeited.
Loan Amount & FMV
Loan amounts are determined based on the fair market value (FMV) of your graded card at the time of the pawn request:
Weekly loans (7-day term): You may borrow up to 50% of the card's FMV. For example, a card with an FMV of $1,000 would qualify for a maximum loan of $500.
Monthly loans (30-day term): You may borrow up to 35% of the card's FMV. For example, a card with an FMV of $1,000 would qualify for a maximum loan of $350.
Minimum loan amount: $13.00 USD. Cards with an FMV below $26.00 are not eligible for the pawn service.
Maximum loan amount: $5,000.00 USD. Regardless of the card's FMV, the maximum loan amount is capped at $5,000.
FMV is determined using market data from recognized grading companies and pricing databases. Phygitals reserves the right to adjust FMV calculations at its sole discretion to reflect current market conditions. The FMV used for your loan is the value at the time the pawn transaction is initiated and is not subject to change during the loan term.
Important: Fluctuations in market value after the pawn is initiated do not affect your loan terms. Your repayment obligation remains the same regardless of whether the card's market value increases or decreases during the loan period.
Interest Rates
Interest on pawn loans is calculated as a flat fee based on the loan period selected:
Weekly loans (7-day term): 5% flat interest on the loan principal. For example, a $100 loan would require a total repayment of $105.
Monthly loans (30-day term): 12% flat interest on the loan principal. For example, a $100 loan would require a total repayment of $112.
Key details about interest:
Simple, flat interest: Interest is calculated as a single flat amount at the time the loan is issued. It does not compound or accrue daily. The total repayment amount (principal + interest) is fixed and known from the moment you accept the loan.
Displayed at offer time: The exact interest amount and total repayment amount are clearly displayed before you confirm the pawn transaction. You will always know the full cost of borrowing before accepting.
No hidden fees: The interest amount presented at the time of the loan offer is the only cost you will be charged. There are no additional hidden charges, late fees, or compounding penalties.
Phygitals reserves the right to modify interest rates for future loans. Any changes to rates will not affect existing active pawn loans. Current rates are displayed in the pawn interface at the time you initiate a loan.
Redemption
You may redeem your pawned card at any time before the loan term expires by repaying the full outstanding balance (original loan principal plus the flat interest amount).
Redemption details:
No early repayment penalty: You are free to redeem your card at any time without incurring additional fees for early repayment. The interest amount is the same whether you redeem on day 1 or the last day of the term.
Payment method: Redemption payments are made from your Phygitals wallet balance in USDC. Ensure you have sufficient funds in your wallet before initiating redemption.
Instant release: Upon successful repayment, the lock on your card is immediately removed via an on-chain transaction, and the card is restored to your vault with full access rights (sell, transfer, ship, etc.).
Partial repayment: Partial repayments are not supported. You must repay the full outstanding balance to redeem your card.
Cannot redeem after expiration: Once the loan term has expired, redemption is no longer available and the card is subject to automatic forfeiture as described below.
It is solely your responsibility to track your loan expiration date and initiate redemption before the term expires. We strongly encourage you to redeem your card well before the loan term ends to avoid forfeiture.
Default & Forfeiture
If you do not redeem your pawned card before the loan term expires, the loan is automatically in default and the card is automatically forfeited.
Consequences of default:
Automatic forfeiture: Upon expiration of the loan term, the loan enters default and the pawned card is automatically transferred to Phygitals via an on-chain transaction. Once forfeited, you will no longer have any claim to the card, and the transfer is irreversible. It is solely your responsibility to track your loan expiration and initiate redemption before the term expires.
No further obligation: Pawn loans on Phygitals are non-recourse. If you default, your only loss is the forfeited card. You will not owe any additional money beyond the card itself.
Liquidation: Phygitals may choose to list the forfeited card for sale on the marketplace, retain it in inventory, or dispose of it at its sole discretion.
Account impact: Repeated defaults may affect your eligibility for future pawn loans and could result in restrictions on your account.
There is no grace period. Forfeiture occurs automatically when the loan term expires. Do not rely on any expectation of additional time beyond the stated loan term. Always aim to redeem well before the expiration date.
Risks
By using the Phygitals pawn service, you acknowledge and accept the following risks:
Loss of asset: If you are unable to repay your loan before the term expires, you will permanently and automatically lose your pawned card. This is the primary risk of using the pawn service.
Market value fluctuation: The market value of your card may change during the loan term. If the card's value increases significantly, you may lose more potential value than the loan amount received. Conversely, if the card's value decreases, the loan amount you received may exceed the card's current worth.
No reminders guaranteed: While Phygitals may send courtesy reminders as the loan term approaches its end, these are not guaranteed. It is solely your responsibility to track your loan expiration and initiate redemption in time.
No investment advice: The pawn service is a financial transaction, not investment advice. Phygitals does not advise on whether pawning is suitable for your individual financial situation.
Platform risk: While Phygitals takes every reasonable measure to ensure the security and availability of its platform, no system is immune to technical issues, outages, or unforeseen events. It is your responsibility to plan redemptions with adequate time buffers.
We strongly recommend that you only pawn items you are comfortable potentially losing, and that you only borrow amounts you are confident you can repay within the loan term.
Contact
If you have any questions about the pawn and lending service, your active loans, or these terms, please contact us:
Support: [email protected]
Legal: [email protected]
Governing Law: These Pawn Terms are governed by the laws of the State of Delaware, United States, without regard to conflict of laws principles. Any disputes arising from or relating to pawn transactions are subject to the dispute resolution and arbitration provisions in our Terms of Service.
Usury Savings Clause: The fees charged for the pawn service are structured as flat fees for storage and administrative services. If any jurisdiction deems these fees to constitute interest, the parties agree that the applicable rate shall be automatically reduced to the maximum rate permitted by applicable law in that jurisdiction, and any excess amounts collected shall be applied to the loan principal or refunded to the borrower.
For urgent matters related to an expiring loan, please reach out as soon as possible so we can assist you promptly.
Last updated
Was this helpful?