Binanceย Cryptoย exchange has launched a non-fungible cryptoย token (NFT) loan feature, which allows users to borrow Ethereumย (ETH) by keeping their blue-chip Non-Fungibleย Tokenย (NFTs) as collateral.
In traditional finance, assets such as gold and real estate are kept as collateral to secure loans. Onย theย otherย hand, Non-Fungibleย Tokenย (NFTs) can likewise serve a similar use case.
Blue-Chip Non-Fungibleย Tokenย (NFT) as Collateral for Binanceย Cryptoย exchange Loan
Binanceย Cryptoย exchange announced the launch of the โ Non-Fungibleย Tokenย (NFT) loanโ facility, allowing users to borrow Ethereumย (ETH) by keeping their Non-Fungibleย Tokenย (NFTs) as collateral.
Changpeng Zhaoโs company will facilitate the service through a peer-to-pool approach, wherein it will serve as a pool for loans.ย
Owners of only four collections, namely Bored Ape Yacht Club (BAYC), Mutant Ape Yacht Club (MAYC), Azuki, and Doodles, can be used as collateral. Nonetheless, Binanceย Cryptoย exchange desiresย to expand to more collections and blockchainsย teck in the future.
Atย theย beginning, the platform is keeping the annual interest price at 3.36 percent and will thereafter increase it to 11.20%. The loan-to-value ratio is 40 percent for Doodles, 50 percent for Azuki and MAYC, and 60 percent for BAYC collections.
With the launch, the Binanceย Cryptoย exchange Non-Fungibleย Tokenย (NFT) marketplace will directly compete with Blurโs โBlend.โ Earlier theseย 30ย days, Blur launched Blend, a peer-to-peer perpetual non-fungible cryptoย token lending protocol that allows lenders to keep flexible rates.
