Binance Launches NFT-Backed Lending Function

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The largest cryp­tocur­ren­cy exchange, Binance, has launched a lend­ing func­tion into its NFT mar­ket­place. Bored Ape Yacht Club (BAYC), Mutant Ape Yacht Club (MAYC), Azu­ki, and Doo­dles are the top-per­form­ing NFTs, and the com­pa­ny has announced that it will start lend­ing ETH against these assets. With NFT Loans, NFT hold­ers will have access to a new source of liq­uid­i­ty that will expand their abil­i­ty to trade with­out sell­ing their valu­able NFTs.

NFTs have been resilient and the market is rebounding

The addi­tion of the lend­ing func­tion comes not long after the release of Blend, a lend­ing pro­to­col devel­oped by Blur, anoth­er major NFT plat­form. How­ev­er, there is one major notable dif­fer­ence between the two lend­ing plat­forms-while Blend is a peer-to-peer plat­form that con­nects bor­row­ers and lenders direct­ly, Bianance’s NFT fea­ture con­nects bor­row­ers and lenders through the platform’s NFT mar­ket­places. Accord­ing to Binance, its approach adds an extra lay­er of secu­ri­ty to the lend­ing process.

On Binance’s NFT lend­ing plat­form, you won’t have to wor­ry about pay­ing any Ethereum trans­ac­tion fees or gas costs. Accord­ing to Binance NFT’s web­site, the cur­rent inter­est rate for NFT loans is 7.91% p.a., and the loan-to-val­ue ratio ranges from 40% to 60%. To com­ple­ment Ethereum, Poly­gon, and its own BNB Chain, the exchange’s NFT mar­ket­place, Binance NFT, announced in ear­ly May that it will begin sup­port­ing Ordi­nals, or Bit­coin NFTs.

The glob­al NFT mar­ket is find­ing sta­bil­i­ty after months of spec­u­la­tion regard­ing the future of these assets. After tak­ing the dig­i­tal assets mar­ket by storm in 2021 with eight-fig­ure fees being paid for some pieces, the hype cooled off sig­nif­i­cant­ly. The harsh win­ter was per­haps best exem­pli­fied by the plum­met­ing of the first Tweet Nft from an ini­tial high of $2.9 mil­lion to a resale price of a pal­try $132. How­ev­er, the mar­ket seems to have rebound­ed, with greater sta­bil­i­ty, albeit with sub­tler pricing.

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