The problem YieldNFT solves

YieldNFT is a peer-to-peer marketplace that allows generating yield from idle NFTs. Holders can put up their NFTs as collateral and lenders with access to liquidity can offer capital against these collateral NFTs. The capital thus raised will be used in promising (automated) yield generation strategies across DeFi. The yield thus generated will be distributed between the participants. There are several NFTs already available in the market with their value constantly going up. There are several collectors who buy these NFTs at very high prices. But once a collector acquires an NFT, there isn't much value generated from it, while sitting around idle inside their wallets. These NFTs can generate returns for the collector only in its next sale, and that too by having to cede ownership. This project aims to help collectors use their idle NFTs to generate passive income, without giving up their ownership. For lenders who are looking for high yield investment opportunities in DeFi, they can invest in such strategies with less effort (automated), while hedging the risk of being liquidated which they would've had to bear, had they invested in these strategies directly. NFT holders can list their NFTs in the marketplace as open for offers from lenders. Lenders checking the marketplace for listed NFTs can then see the NFT and make offers. Once the NFT holder and lender reach a consensus around the offer and the yield generation strategy, the NFT along with the funds offered by the lender will be transferred to the protocol's escrow contract. The capital offered by the lender will be invested in one of the high risk, even leveraged yield generation strategies across DeFi, by the protocol. The protocol would then keep accruing yield from these strategies. The yield thus generated will be shared between the NFT provider and the lender, generating passive income off of the otherwise idle NFT.

Challenges I ran into

1. There were a lot of existing DeFi projects to learn and research about, before starting off building this project. So a lot of time had to be spent on research
2. We had initially planned to directly integrate Alpha Homora V2's leveraged yield farming as the available investment strategy. But leverage/borrow functionality had been deactivated on AHv2 post the AHv2/CREAM exploit. Also, the AHv2 code that handles opening a leveraged position was not too "integration-friendly", involving encoded calldata having to be passed to AHv2 contracts. So, considering the time left for the Fellowship, we had to settle with an integration with Yearn Vaults for the moment.
3. To integrate Yearn Vaults, we decided to utilize Zapper.fi's integration contracts and API to have a better developer experience and richer functionality for the project, including automatic optimal swapping of the input tokens. But we soon came to know that Zapper.fi API doesn't support forked mainnet nor any of the testnets for now. So the prospect of being able to build and test a prototype of the project was highly reduced.
4. Hence we directly integrated Yearn's DAI Vault, DAI token, and Hashmasks and was able to build out a working prototype, that proves the hypothesis for this project.
5. We were also able to figure out how to re-enable AHv2's leverage/borrow functionality and open a leveraged position, on a forked mainnet, but the work required to fully implement that into the current project would take more time, which of course would be worked on, post the Fellowship