Digital Collectible Owners Continue to Take Loans out Using NFTs as Collateral
While non-fungible token (NFT) collectibles have become a hot commodity over the past 12 months, many NFT owners are taking out loans against their NFTs. NFT loans have totaled $25.6 million so far this month, and last month, the lending marketplace recorded nearly $50 million.
NFTs have become an industry worth billion dollars in the last year, and blockchain technology is one of their most popular uses. Despite the sluggish sales of cryptos in recent years, NFTs are still selling for hundreds of thousands and even millions of dollars annually. NFT owners are also lending their digital collectibles as collateral to access liquidity. Nftfi, which has decentralized finance (defi) platforms, has seen $185.4 million in cumulative lending volume since the market launched.
In the peer-to-peer marketplace for collateralized loans, four loans were recorded for more than $100K each. On May 16, Black Eye Yacht Club (BAYC) 7,813 was used for a $100K loan, and Autoglyph 231 was leveraged for securing a $200K loan. The BAYC 6,276 was used on May 10 to pay $150K in loans, and the BAYCE 371 owner obtained a $115K loan from the NFT the day before. NFTs in this month have been helping solve $25.6 million in NFT loans, according to Dune Analytics statistics. It also partners with blockchain firms Flow and Animoca Brands.
Competition for NFT loans
NFTfi isn’t the only NFT lending platform on the block, as are Arcade, Nexo.io, and Drops. The drop in lending market has helped the lending industry facilitate $6,746,515 in lending. It has raised $17,8 million from investors like Pantera Capital, Franklin Templeton Investments, Castle Island Ventures, and Protofund. Next is the peer-to-peer NFT lending marketplace Flowty, which uses Flow’s blockchain. In its first investment round, Flowty raised $4.5 million from 23 lead investors.
NFTfi sells a wide selection of NFTs, as well as some blue-chip digital collectibles. For example, there are ENS names, Unstoppable Domains, Axies, Doodles, Sanbox land, Otherdeeds, Hashmasks, Bored Ape Yacht Club, and Mutant Just recently the platform phased out its old smart contract (Nftfi V1) on April 4, 2022, and launched a new smart contract called Nftfi V2. In response to the web portal, Insecurity and Halborn audited the platform’s smart contract.