'Buy Now, Pay Later' financing

Unlockd provides developers with the flexibility to build a wide range of financial solutions using the Unlockd SDK. While the SDK offers the potential to replicate the full Unlockd product, we encourage developers to explore specific use cases such as borrowing against Real-World Assets (RWAs) and 'Buy Now, Pay Later' financing. These pages provide an overview of these use cases and hint at the detailed guides that will be available soon.


'Buy Now, Pay Later' (BNPL) financing is a payment solution that allows users to purchase tokenized assets immediately while deferring payment indefinitely (thanks to Unlockd's open-ended loans).

By integrating BNPL functionalities using the Unlockd SDK, developers can provide a seamless and flexible financing option directly at the point of sale, backed by Real-World Assets.

How BNPL Works

  1. User Selection: During the checkout process, users select the 'Buy Now, Pay Later' option as their preferred payment method.

  2. Risk Assessment: Unlockd conducts a real-time appraisal of the user's tokenized assets to determine their value. This appraisal helps in setting an appropriate Loan-to-Value (LTV) ratio for the loan.

  3. Down Payment Selection: Users are required to select a down payment amount, which may sometimes be a minimum required amount based on the value of the asset and the LTV ratio.

  4. Loan Origination: Once the down payment is made, a loan is originated on the Unlockd protocol. The user's tokenized assets are used as collateral to secure the loan.

  5. Instant Payment: The merchant receives the full payment for the asset immediately from Unlockd's liquidity pool, ensuring they do not bear any financial risk.

  6. Open-Ended Loan: The loan remains open-ended, allowing the user to repay at their convenience as long as the health factor of their collateralized asset remains within acceptable limits. There are no fixed repayment schedules.

  7. Collateral Management: The user’s collateralized assets are held securely in their Unlockd Account. These assets remain in the user’s custody and ownership, with Unlockd intervening only to prevent unauthorized transactions during the loan period.

  8. Health Factor Monitoring: Users need to maintain the health factor of their loan, which is continuously monitored. If the health factor drops below a certain threshold, the user may need to add more collateral or repay part of the loan to restore the balance.

  9. Completion: Once the loan is fully repaid, the collateralized assets are released back to the user without any restrictions.

Benefits of BNPL with Unlockd

  • Seamless Integration: Easily incorporate BNPL options into existing checkout flows using the Unlockd SDK.

  • Enhanced Flexibility: Users enjoy the flexibility of deferred payments without immediate financial burden.

  • Improved Cash Flow for Merchants: Merchants receive full payment upfront, improving their cash flow and reducing financial risk.

  • Lower Risk: The use of tokenized assets as collateral reduces the risk for both users and the protocol, enabling better loan terms and interest rates.

How-To Guide

A detailed, step-by-step guide to building a 'Buy Now, Pay Later' financing solution using the Unlockd SDK is currently in development. This guide will walk you through the process of integrating BNPL features, from user interface design to backend integration with Unlockd's liquidity pools. Check back soon for the full guide.

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