NFT
Binance’s NFT marketplace has introduced a new feature that allows users to borrow cryptocurrencies using NFTs as collateral, marking entry into the NFT lending space.
The Binance NFT marketplace currently supports ether (ETH) lending against “blue-chip” NFTs, such as Bored Ape Yacht Club (BAYC), Mutant Ape Yacht Club (MAYC), Azuki and Doodles, according to an announcement on Thursday. More cryptocurrencies and NFTs will be supported in the near future, a Binance NFT spokesperson told The Block.
The feature means Binance NFT users don’t have to sell their NFTs if they need money urgently. “NFT loans will add a new form of liquidity for NFT holders, allowing them to participate in the market without letting go of their precious NFTs,” Mayur Kamat, lead product at Binance, said in the statement.
The current interest rate on NFT loans is 7.91% per annum and the loan-to-value ratio ranges from 40% to 60%, according to the Binance NFT website. There are no gas fees or Ethereum transaction fees.
Binance introduced its NFT marketplace in April 2021 and launched it in June of that year. Earlier this month, Binance NFT said it will add support for Ordinals, or Bitcoin NFTs, to the current blockchains Ethereum, Polygon, and its native BNB Chain.
The Binance NFT lending feature comes shortly after NFT marketplace giant Blur launched its NFT lending protocol called Blend earlier this month. Blend allows lenders to set their own interest rates and loan-to-value ratios, as The Block Research analyst Brad Kay recently reported. “Blend’s meteoric rise in the NFT lending market is undeniable. As it continues to break new ground, the protocol proves that a market-driven approach can successfully revolutionize the credit landscape,” said Kay.
