Binance to Launch NFT Loans Feature with Zero Gas Fee

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Binance will enter the NFT lend­ing mar­ket with the launch of a new fea­ture that allows users to secure an ETH loan using their NFTs as collateral.

Post­ed May 26, 2023 at 2:32 am EST. Updat­ed May 26, 2023 at 4:13 am EST. 

Cryp­to exchange Binance plans to release its NFT Loan fea­ture at 7:00 am ET on Friday. 

The new fea­ture will facil­i­tate ETH loans at launch, sup­port­ing high-val­ue NFT col­lec­tions like Bored Ape Yacht Club (BAYC), Azu­ki, Mutant Ape Yacht Club (MAYC), and Doo­dles.  

Accord­ing to the announce­ment, users will be offered a 70% dis­count on bor­row­ing rates dur­ing the ini­tial pro­mo­tion peri­od. This will bring down the stan­dard bor­row­ing inter­est rates of 11.2% per annum to 3.36% per annum.

The plat­form will also facil­i­tate instant liq­uid­i­ty, zero gas fees and liq­uid­i­ty pro­tec­tion. Binance will act as the pool for these peer-to-peer loans, which will be open-term and overcollateralized.

Each NFT col­lat­er­al-loan pair will also have its own dis­tinct Loan to Val­ue (LTV) ratio. At the time of writ­ing, the BAYC col­lec­tion had an LTV of 60% and the Doo­dles col­lec­tion had an LTV of 40%.

Binance is the newest entrant to the NFT lend­ing space, which has grown into a $1 bil­lion indus­try, accord­ing to data from Dune. Some of the largest play­ers include NFT­fi and Bend­DAO, which have facil­i­tat­ed $429 mil­lion and $315 mil­lion worth of cumu­la­tive bor­row­ing vol­ume respec­tive­ly over time. 

How­ev­er, Blur’s recent­ly launched Blend has quick­ly risen the ranks since its launch at the start of this month, and now com­mands 82% of the NFT lend­ing mar­ket share.

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