as collateral While non-fungible token (NFT) collectables have become popular in recent months, some NFT holders are going into debt against their tokens.
So far this month, NFTfi has facilitated $25.6 million in NFT loans, while the lending marketplace logged nearly $50 million in NFT loans last month.
The Growth of NFT Lending and Borrowing
In the previous year, NFTs have grown into a multibillion-dollar sector and a popular blockchain technology use scenario. NFTs are still trading for hundreds of thousands, if not millions, of dollars per digital collectable, despite recent sales slumping due to the crypto market downturn. NFT owners are also lending their digital treasures for liquidity, in addition to sales and auctions. Since the market's debut, NFTfi, a decentralized finance (DeFi) platform, has witnessed a total loan volume of $185.4 million.
Four loans totalling more than $100K were confirmed in the last week on the peer-to-peer marketplace for NFT collateralized loans. On May 16, BAYC 7,813 was leveraged for a $100K loan, while on May 12, Autoglyph 231 was leveraged for a $200K loan. On May 10, BAYC 6,276 was utilized for a $150K loan, and the owner of BAYC 371 had gotten a $115K loan for the NFT the day before. According to Dune Analytics' figures, NFTfi has enabled $25.6 million in NFT loans so far this month.
Competition for NFT Lending
NFTfi isn't the only NFT lending platform on the market; Arcade, Nexo.io, and Drops are just a few. The Drops loan market has approved $6,746,515 in loans, according to statistics. Pantera Capital, Franklin Templeton Investments, Castle Island Ventures, and Protofund were among the investors who contributed $17.8 million to Arcade. Flowty raised $4.5 million in its first round of funding from two lead investors and a total of 23 investors.
NFTfi features a large array of NFTs as well as a variety of blue-chip digital collectable collections. ENS names, Unstoppable Domains, Axies, Doodles, Sanbox land, Otherdeeds, Hashmasks, Bored Ape Yacht Club, and Mutant Ape Yacht Club are just a few examples.
On April 4, 2022, the platform retired its old smart contract (NFTfi V1) and replaced it with a new smart contract called NFTfi V2. Chainsecurity and Halborn evaluated the platform's V2 smart contract, according to the web portal.
