NFTfi Eyes Massive Growth for NFT Lending; CryptoPunks, BAYC & Art Blocks Most Common Collateral
NFTfi, a company in the non-fungible token (NFT) lending industry, expects to see massive growth in the sector, where crypto holders get a chance to earn yields on their capital, or potentially secure a digital art piece from top collections like CryptoPunks at steep discounts.
The NFT lending market is still in its infancy, but there’s ample room for growth, according to Stephen Young, the founder and CEO of NFTfi. He said that the company has already facilitated thousands of loans through its platform, helping NFT investors unlock capital they own in the form of digital art.
“An NFT holder looking to get some liquidity for their asset comes to NFTfi, connects their wallet to the platform and lists an NFT to be used as collateral,” Young told Cryptonews.com.
He added that the NFT is then locked into a smart contract escrow as soon as a borrower accepts an offer from a lender. While in escrow, the NFT cannot be accessed until either the loan and interest are repaid in full, or the borrower defaults.
In the case of a default, the lender takes over ownership of the NFT, potentially getting it at a steep discount.
Describing the current state of the NFT lending market, Young said that NFT lending currently only makes up about 0.5% of the entire NFT market.
When compared to traditional lending markets, which Young said are generally worth from 10% to 20% of the asset class itself, “further strong growth” can be expected in NFT lending as more people realize they can use their NFTs as collateral instead of selling them, Young opined.
According to Young, several large loans have been facilitated via the peer-to-peer platform as of late, which earlier this month launched in an updated version.
Among the biggest loans seen on the
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