Close Menu
  • News
    • Bitcoin
    • Altcoins
    • DeFi
    • Regulation
    • Market Cap
    • Web 3
    • Scam
  • Blockchain
  • NFT
  • Metaverse
  • Analysis
  • Learn
  • Blog
  • Contact
    • Tech7685@gmail.com
What's Hot

‘Altcoin season:’ Hyperliquid Whale’s prediction as Bitcoin is approaching $ 120k

2025-05-23

The graph makes safe cross-chain transfers from GRT possible with CCIP from Chainlink

2025-05-23

Alchemy acquires NFT Launchpad Heymint to speed up the development of Smart Wallet

2025-05-23
Facebook X (Twitter) Instagram
  • Contact
  • Terms & Conditions
  • Privacy Policy
  • DMCA
  • Advertise
  • BitcoinPlatform.com
Facebook X (Twitter) Instagram
Free Cryptocurrency – Bitcoin | Altcoins | Blockchain | News Stories Updated Daily
  • News
    • Bitcoin
    • Altcoins
    • DeFi
    • Regulation
    • Market Cap
    • Web 3
    • Scam
  • Blockchain

    The graph makes safe cross-chain transfers from GRT possible with CCIP from Chainlink

    2025-05-23

    Unmarshal partners with GPTverse to bring real-time blockchain data to AI-ecosystem

    2025-05-23

    Eni and Certik Partner to elevate Node Security and Decentralized Trust in Web3 Space

    2025-05-23

    FIFA starts Avalanche L1 to Power Soccer NFT Collectibles Platform

    2025-05-23

    VELO works together with Paxos to redefine the infrastructure of the Stablecoin payments

    2025-05-22
  • NFT

    Alchemy acquires NFT Launchpad Heymint to speed up the development of Smart Wallet

    2025-05-23

    Delorean launches a car marketplace on the chains with Patrick Stewart

    2025-05-23

    Beratone NFT Avatars are now live on OpenSea

    2025-05-23

    Hashrate Hackers introduces Ordinals NFT collections supported by Bitcoin Hashrate

    2025-05-22

    FIFA starts Avalanche L1 to Power Soccer NFT Collectibles Platform

    2025-05-22
  • Metaverse

    Shib: The Metaverse – Part of the expanding Shiba Inu ecosystem

    2025-01-03

    Experience to Earn: Everdome’s Metaverse Frontier

    2024-12-30

    Beyond Bots: Meta Motivo and the Dawn of Human Digital Life

    2024-12-13

    Exploring NetVRk: What’s Behind This AI-Powered Virtual Universe?

    2024-10-28

    Council of Europe emphasizes the impact of Metaverse on privacy and democracy

    2024-09-05
  • Analysis

    Kraken Taps Solana Blockchain to roll out tokenized US shares and ETFs for non-American traders

    2025-05-23

    Dogecoin (doge) gets hot: hints on his head in the event of a large outbreak forward

    2025-05-23

    Crack to launch 24/7 trade for Tokenized US shares via Solana

    2025-05-23

    The world’s largest crypto exchange by trade volume Binance adds support for Trump-linked World Liberty Financial Stablecoin

    2025-05-23

    XRP price to see 64,000% rally up to $ 1,700? Analysts reveal at the end of year forecasts

    2025-05-23
  • Learn

    What Is a DEX (Decentralized Exchange)?

    2025-05-21

    Blockchain Explained: What It Is, How It Works and Why We Need It

    2025-05-21

    Types of Blockchain Layers Explained: Layer 0, Layer 1, Layer 2 and Layer 3

    2025-05-16

    Token vs. Coin: Key Differences You Must Know as a Beginner

    2025-05-15

    Inside Changelly: 10 years of steadfast support and compliance

    2025-05-15
  • Blog
  • Contact
    • Tech7685@gmail.com
Free Cryptocurrency – Bitcoin | Altcoins | Blockchain | News Stories Updated Daily
Home»NFT»NFT lending is trending, raising concerns about ‘predatory’ platform behavior
NFT

NFT lending is trending, raising concerns about ‘predatory’ platform behavior

2023-06-07No Comments6 Mins Read
Share
Facebook Twitter LinkedIn Pinterest Email


NFT


While non-fungible token (NFT) trading volumes fell in May, the adjacent NFT lending space is booming. And so far the reviews have been mixed.

NFTfi – an evolving term for technology that sits at the intersection of NFTs and decentralized finance (DeFi) – is on the rise. NFTfi encompasses a suite of tools aimed at providing wider utility and liquidity to NFTs, including collateralised NFT loans, fractionated tokens, and renting or lending NFTs.

What started as a way to capitalize on the 2021 bull run of NFTs has recently exploded in popularity as major Web3 players entered the market. In May, the leading NFT marketplace launched Blur Blend (short for Blur Lending) – a peer-to-peer lending platform that allows users to borrow against their NFTs as collateral. The platform, benefiting from Blur’s popularity, quickly captured 82% of the total NFT lending market share within its first three weeks.

Soon after, other NFT lending platforms started popping up. Binance launched its feature called Binance NFT Loan, which allows holders to secure ETH loans by using their NFTs as collateral. And Joseph Delong, the former CTO of DeFi protocol SushiSwap, launched Astaria, which uses a third party to facilitate its credit market.

Dozens of traders have flocked to these platforms to “pledging” their tokens to earn yield. In addition, traders who may not be able to afford expensive blue-chip NFT from collections such as Bored Ape Yacht Club (BAYC) or Azuki can now lease these tokens for a fraction of the cost.

There are undoubtedly benefits to participating in NFT lending, although the activity also carries risks. Some Blur traders and NFTfi-native users questioned Blend’s lending mechanisms and urged newer traders to educate themselves on how to safely borrow NFTs before diving in.

See also  House of Skulls NFT project marks a new evolution in the NFT space

And while traders can support the idea of ​​making extra money by lending out their dormant tokens, the risk of liquidation and concerns about platform-specific lending mechanisms and decentralization between these platforms remain.

NFT loans benefit “lazy” traders with large premiums

This emergence of NFT lending platforms makes sense when you consider current market conditions. Many NFT holders who bought their tokens during the bull run want to earn some extra ETH in falling markets. They can pledge their NFTs by leasing them to a trader who will pay to hold them for a period of time, earning the original owner some ETH. In turn, the borrower can join an NFT ecosystem or gain access to certain benefits that they might not otherwise have access to.

For people like Hamzah Khan, Polygon’s growth director, who playfully describes his approach to NFT trading as “lazy,” borrowing can be lucrative.

“I just keep things for the long haul,” Khan told CoinDesk. “I don’t use them on a daily basis… fundamentally I like it [NFT lending] because it gives me more capital.”

When asked about the potential dangers of NFT lending, Khan noted the risk of liquidation if the asset price falls, which can happen if the token price drops below 30-40%. However, he stressed that he is optimistic about the growing industry and sees value in lending assets beyond the highly sought-after blue-chip NFTs.

“I have so many PFPs and I want to use them somewhere, but this vertical can get much bigger because houses can also be NFTs and mortgages can be labeled as ERC-721s,” Khan said. “I think people are people who seriously underestimate how much we can do with NFTs.”

See also  NFT gas usage shows downward trend, signals shift in landscape

While the NFT lending markets have mainly courted JPEG traders in hopes of earning extra returns on their tokens, they operate in a similar way to the credit markets outside the crypto space, such as the housing market, which have the potential to attract thousands more traders. and businesses on board the Web3 landscape.

New traders are most at risk for ‘predatory’ behavior

Not all NFT lending platforms work the same way. Mason Cagnoni, chief operating officer of NFT lending platform Wasabi Protocol, and Karan Karia, vice president of business development at Wasabi, told CoinDesk that while the primary risk of NFT lending is early liquidation if a token’s price falls, Blend’s “deposit” feature allows a trader to make multiple payments over time for an NFT purchase, which can be inconvenient for traders new to trading NFTs.

“It’s pitched as a ‘buy now, pay later’ that uses a perpetual back loan, which is super predatory on the borrower,” Karia said. “Have you ever heard of a loan where you can be called immediately and you have 24 hours to pay back? Like, the only person doing that is the mafia.

Cagnoni noted that new traders are more prone to risky behavior without fully understanding the consequences.

“Lending platforms already existed — if you look at a Dune dashboard with the overlap of users, the Blend users are all new,” said Cagnoni. “They’re not NFTfi users, for example.”

According to a recent report from blockchain analytics platform DappRadar, in Blend’s first three weeks it accounted for 46.2% of Blur’s total trading volume. Cagnoni and Karian both explained that it’s likely that so many new merchants have come to Blend because of Blur’s points farming system. While Blur is not alone in offering rewards to its users for trading activities, its rapid growth and market dominance are often attributed to its successful BLUR token airdrops.

See also  NFT -markt sees Pudgy Penguins at the top of $ 768k in sale

Karia suggested that once Blur users earn their long-sought tokens through an upcoming airdrop, current numbers may dwindle. He noted that in the larger credit ecosystem, emerging platforms need to put decentralization at the forefront of their mission to keep NFT lending as close to DeFi as possible.

“I think we’re all in this Web3 space because we believe in decentralization, and so have these decentralized open consent protocols that all tie together and create a really open NFTfi system — I think that’s a much more positive view, Caria said. “That’s what we’re building towards, rather than having everything locked up in one place, whether it’s a centralized exchange like Binance, or a pseudo-centralized platform like Blur.”


Source link

behavior Concerns Lending NFT Platform predatory raising trending
Share. Facebook Twitter Pinterest LinkedIn Tumblr Email

Related Posts

Alchemy acquires NFT Launchpad Heymint to speed up the development of Smart Wallet

2025-05-23

Delorean launches a car marketplace on the chains with Patrick Stewart

2025-05-23

Beratone NFT Avatars are now live on OpenSea

2025-05-23

FIFA starts Avalanche L1 to Power Soccer NFT Collectibles Platform

2025-05-23
Add A Comment
Leave A Reply Cancel Reply

Top Posts

TRON’s Surge, Cardano’s Upgrade and BlockDAG’s Testnet launch; 30,000x ROI potential unlocked!

2024-09-20

‘We Might Have a Breakout Here’: Analyst Says One Top 10 Altcoin Poised for New All-Time High

2025-01-15

RCO Finance – This $0.05 Altcoin is expected to follow Bitcoin’s rally

2024-10-24
Editors Picks

Bitcoin Dominance Pieks at 68% – Altcoin season income?

2025-03-22

Magic Eden expands user accessibility with an innovative cross-chain wallet

2024-01-29

Putin warns of power shortages due to Bitcoin mining and calls for expansion of CBDC

2024-07-17

Chainstack makes Scroll ZKEVM support possible with seamless node implementation

2025-04-30
About
About

Our mission is to develop a community of people who try to make financially sound decisions. The website strives to educate individuals in making wise choices about Cryptocurrencies, Defi, NFT, Metaverse and more.

We're social. Connect with us:

Facebook X (Twitter) Instagram Pinterest YouTube
Top Insights

‘Altcoin season:’ Hyperliquid Whale’s prediction as Bitcoin is approaching $ 120k

The graph makes safe cross-chain transfers from GRT possible with CCIP from Chainlink

Alchemy acquires NFT Launchpad Heymint to speed up the development of Smart Wallet

Get Informed

Subscribe to Updates

Get the latest news and Update from Free.cc about Crypto, Metaverse, NFT and more.

  • Contact
  • Terms & Conditions
  • Privacy Policy
  • DMCA
  • Advertise
  • BitcoinPlatform.com
© 2025 Free.cc - All rights reserved. Contact: info@free.cc

Type above and press Enter to search. Press Esc to cancel.

  • bitcoinBitcoin(BTC)$110,422.60-0.12%
  • ethereumEthereum(ETH)$2,651.881.61%
  • tetherTether USDt(USDT)$1.00-0.02%
  • rippleXRP(XRP)$2.420.78%
  • binancecoinBNB(BNB)$683.320.50%
  • solanaSolana(SOL)$180.372.50%
  • usd-coinUSDC(USDC)$1.00-0.01%
  • dogecoinDogecoin(DOGE)$0.2425701.84%
  • cardanoCardano(ADA)$0.812.40%
  • tronTRON(TRX)$0.2731790.29%
  • suiSui(SUI)$3.82-5.40%
  • hyperliquidHyperliquid(HYPE)$35.0515.09%
  • chainlinkChainlink(LINK)$16.591.94%
  • avalanche-2Avalanche(AVAX)$24.963.88%
  • stellarStellar(XLM)$0.3003471.03%
  • shiba-inuShiba Inu(SHIB)$0.0000152.04%
  • bitcoin-cashBitcoin Cash(BCH)$437.635.60%
  • hedera-hashgraphHedera(HBAR)$0.2025991.17%
  • unus-sed-leoUNUS SED LEO(LEO)$8.86-0.04%
  • the-open-networkToncoin(TON)$3.130.01%
  • polkadotPolkadot(DOT)$4.912.42%
  • litecoinLitecoin(LTC)$99.771.73%
  • moneroMonero(XMR)$392.06-0.86%
  • bitget-tokenBitget Token(BGB)$5.789.96%
  • pepePepe(PEPE)$0.00001510.83%
  • piPi(PI)$0.79-4.78%
  • daiDai(DAI)$1.00-0.01%
  • ethena-usdeEthena USDe(USDE)$1.00-0.06%
  • uniswapUniswap(UNI)$6.421.77%
  • bittensorBittensor(TAO)$458.95-2.84%
  • aaveAave(AAVE)$254.341.11%
  • nearNEAR Protocol(NEAR)$3.033.54%
  • aptosAptos(APT)$5.818.34%
  • ondo-financeOndo(ONDO)$1.011.19%
  • okbOKB(OKB)$52.83-0.29%
  • kaspaKaspa(KAS)$0.114524-0.41%
  • internet-computerInternet Computer(ICP)$5.612.68%
  • ethereum-classicEthereum Classic(ETC)$19.450.44%
  • official-trumpOFFICIAL TRUMP(TRUMP)$13.54-6.39%
  • gatechain-tokenGateToken(GT)$21.930.56%
  • render-tokenRender(RENDER)$5.164.81%
  • crypto-com-chainCronos(CRO)$0.0989160.05%
  • polygon-ecosystem-tokenPOL (prev. MATIC)(POL)$0.2494370.54%
  • vechainVeChain(VET)$0.0302161.31%
  • mantleMantle(MNT)$0.761.52%
  • ethenaEthena(ENA)$0.4169882.88%
  • worldcoin-wldWorldcoin(WLD)$1.5321.60%
  • usd1World Liberty Financial USD(USD1)$1.00-0.13%
  • artificial-superintelligence-allianceArtificial Superintelligence Alliance(FET)$0.9010.09%
  • arbitrumArbitrum(ARB)$0.4241670.99%
  • bitcoinBitcoin(BTC)$110,422.60-0.12%
  • ethereumEthereum(ETH)$2,651.881.61%
  • tetherTether USDt(USDT)$1.00-0.02%
  • rippleXRP(XRP)$2.420.78%
  • binancecoinBNB(BNB)$683.320.50%
  • solanaSolana(SOL)$180.372.50%
  • usd-coinUSDC(USDC)$1.00-0.01%
  • dogecoinDogecoin(DOGE)$0.2425701.84%
  • cardanoCardano(ADA)$0.812.40%
  • tronTRON(TRX)$0.2731790.29%
  • suiSui(SUI)$3.82-5.40%
  • hyperliquidHyperliquid(HYPE)$35.0515.09%
  • chainlinkChainlink(LINK)$16.591.94%
  • avalanche-2Avalanche(AVAX)$24.963.88%
  • stellarStellar(XLM)$0.3003471.03%
  • shiba-inuShiba Inu(SHIB)$0.0000152.04%
  • bitcoin-cashBitcoin Cash(BCH)$437.635.60%
  • hedera-hashgraphHedera(HBAR)$0.2025991.17%
  • unus-sed-leoUNUS SED LEO(LEO)$8.86-0.04%
  • the-open-networkToncoin(TON)$3.130.01%
  • polkadotPolkadot(DOT)$4.912.42%
  • litecoinLitecoin(LTC)$99.771.73%
  • moneroMonero(XMR)$392.06-0.86%
  • bitget-tokenBitget Token(BGB)$5.789.96%
  • pepePepe(PEPE)$0.00001510.83%
  • piPi(PI)$0.79-4.78%
  • daiDai(DAI)$1.00-0.01%
  • ethena-usdeEthena USDe(USDE)$1.00-0.06%
  • uniswapUniswap(UNI)$6.421.77%
  • bittensorBittensor(TAO)$458.95-2.84%
  • aaveAave(AAVE)$254.341.11%
  • nearNEAR Protocol(NEAR)$3.033.54%
  • aptosAptos(APT)$5.818.34%
  • ondo-financeOndo(ONDO)$1.011.19%
  • okbOKB(OKB)$52.83-0.29%
  • kaspaKaspa(KAS)$0.114524-0.41%
  • internet-computerInternet Computer(ICP)$5.612.68%
  • ethereum-classicEthereum Classic(ETC)$19.450.44%
  • official-trumpOFFICIAL TRUMP(TRUMP)$13.54-6.39%
  • gatechain-tokenGateToken(GT)$21.930.56%
  • render-tokenRender(RENDER)$5.164.81%
  • crypto-com-chainCronos(CRO)$0.0989160.05%
  • polygon-ecosystem-tokenPOL (prev. MATIC)(POL)$0.2494370.54%
  • vechainVeChain(VET)$0.0302161.31%
  • mantleMantle(MNT)$0.761.52%
  • ethenaEthena(ENA)$0.4169882.88%
  • worldcoin-wldWorldcoin(WLD)$1.5321.60%
  • usd1World Liberty Financial USD(USD1)$1.00-0.13%
  • artificial-superintelligence-allianceArtificial Superintelligence Alliance(FET)$0.9010.09%
  • arbitrumArbitrum(ARB)$0.4241670.99%