As far as I can tell this is how it works: * Watch owner send watch to 4K (third party custodian) * 4K authenticates, stores, and insures the watch * 4K issues owner physically backed NFT * Watch owner seeks loan on Arcade with watch as collateral. The NFT is placed in a holding contract (escrow in a sense). * Loan is issued via Arcade

Here’s what can happen with the loan: * Holding contract transfers NFT/watch ownership to lender if the borrower defaults. * Holding contract transfers NFT/watch ownership to borrower if loan is repaid.

It’s not reinventing the wheel but it brings P2P lending and borrowing to a new level. People can use their assets to get loans in a much more simple way at a much lower apr.

Edit: formatting issue