Parallel Finance Focuses on NFT Margin Lending Despite Market Downturn
The nonfungible token (NFT) lending protocol ParaSpace, now rebranded as Parallel Finance, remains committed to its core product amid challenges in the sector. Founder and CEO Yubo Ruan explains that the protocol uses various strategies to mitigate risks associated with high volatility in NFTs, including diversified liquidity pools and dynamic loan-to-value ratios.
Ruan believes that NFT margin lending continues to be viable, serving a niche market of collectors and investors looking for leverage in their investments. While NFT trading volume has declined significantly in recent months, Ruan sees potential for the implementation of NFTs as digital passports and the development of soulbound tokens.
Parallel Finance’s Expansion into DeFi Services
As Parallel Finance expands its offerings, it focuses on two main areas: liquid staking and Parallel L2. The protocol aims to achieve fast transactions with low gas fees while optimizing for security and scalability through zero-knowledge proofs and Arbitrum Orbi.
Ruan also mentions the exploration of integrating liquid staking with NFT lending, allowing NFT holders to earn yields on their staked assets. This approach provides a tradable derivative token representing the staked investment, addressing liquidity challenges in staking.
Growth and Rebranding
ParaSpace, founded in 2022, has experienced significant growth, reaching a valuation of $500 million with over 340,000 users. Despite the market downturn, the protocol reached a peak total value locked of $900 million in May before merging with Parallel Finance in August.
Hot Take: Parallel Finance Remains Bullish on NFT Margin Lending Amid Market Challenges
Parallel Finance, formerly known as ParaSpace, is confident in the viability of NFT margin lending despite the recent decline in NFT trading volume. The protocol’s use of diversified liquidity pools and dynamic loan-to-value ratios helps mitigate risks associated with high volatility. Founder and CEO Yubo Ruan believes that NFTs have the potential to serve as digital passports and soulbound tokens, enabling access to virtual and real-world utilities.
By
By
By
