As non-fungible collectibles (NFTs) have become a hot commodity over the past 12 months, a number of NFT owners are taking out loans against their NFTs. This month, a project called Nftfi has so far facilitated $25.6 million in NFT loans, and last month the lending market saw nearly $50 million in NFT loans.
NFT lending and borrowing continues to grow
NFTs have become a billion dollar industry over the past year and a popular use case for blockchain technology. Even though sales have been dropping lately amid the downturn in the crypto market, NFTs still sell for hundreds of thousands, if not millions of dollars per digital collectible. In addition to NFT sales and auctions, NFT owners also lend their digital collectibles to access cash. For example, a decentralized finance (defi) platform called Nftfi has had a cumulative loan volume of $185.4 million since the market’s inception.
Over the past week, the peer-to-peer marketplace for NFT-backed loans has seen four loans over $100,000 or more each. On May 16, Bored Ape Yacht Club (BAYC) 7,813 was used for a $100,000 loanand Autoglyph 231 was mined for a $200,000 loan May 12. BAYC 6 276 was used for a $150,000 loan on May 10, and the owner of BAYC 371 was able to obtain a Loan of $115,000 for the NFT the day before. So far this month, Nftfi has facilitated $25.6 million in NFT loans, according to statistics from Dune Analytics. Nftfi is also a partner of blockchain companies To flow and Animoca brands.
NFT Loan Competition
Nftfi is not the only NFT lending platform on the block, as there are others like Arcade, Nexo.ioand Drops. Statistics show that the Drops loan market facilitated loans of $6,746,515. Arcade has raised $17.8 million from investors including Pantera Capital, Franklin Templeton Investments, Castle Island Ventures, and Protofund. Another competitor is the peer-to-peer NFT lending market Fluid, which is built on the Flow blockchain network. Flowty raised $4.5 million in the company’s first investment round from two lead investors and 23 in total.
Nftfi also offers a wide selection of NFTs and an assortment of a number of top-notch digital collectible collections. For example, there are ENS Names, Unstoppable Domains, Axes, Doodles, Sanbox Lands, Other Acts, Hashmasks, Bored Ape Yacht Club, and Mutant Ape Yacht Club (MAYC). Just recently, the platform retired its old smart contract (Nftfi V1) on April 4, 2022 and launched a new smart contract called Nftfi V2. According to the web portal, Chainsecurity and Halborn have audited the platform Smart contract V2.
What do you think of people lending their NFTs as collateral to acquire a loan? Let us know what you think about this topic in the comments section below.
Image credits: Shutterstock, Pixabay, Wiki Commons
Disclaimer: This article is for informational purposes only. This is not a direct offer or the solicitation of an offer to buy or sell, or a recommendation or endorsement of any product, service or company. bitcoin.com does not provide investment, tax, legal or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.