8xbet Borrowing Against NFTs: A Billion Dollar Market - BLOCKCHAINWEBBAG

Borrowing Against NFTs: A Billion Dollar Market

The non-fungible token market has made tremendous strides over the last few years. However, nothing symbolizes this maturity more than the fast-growing NFT lending market. Several projects have taken on the task of building up infrastructure that unlocks liquidity for the highly illiquid NFTs. As a result, borrowing against NFT collectibles has now crossed the $1 billion mark.

The figure comes from eight NFT liquidity providers, with NFTfi leading the way, according to Dune Analytics. As of April 13, it has seen over $392 million borrowed on its platform. It’s closely followed by BendDAO with over $300 million in second place, and Paraspace sits in third with just over $241 million. The latter is a relatively new entry into the NFT liquidity market, and it is promising to shake up the establishment. Incredibly, the number of borrowers has also increased over the past few months, currently sitting at over 40,000 cumulatively.

NFT Borrowing will Become Huge with Time

Still, as more NFT holders learn of the existence of these platforms, the figure is expected to grow exponentially. It’s a sentiment that is shared by Andrej Skraba CMO at NFTfi. Speaking to the press, he notes, “At present, many digital asset holders are either unaware of the existence of credit markets or are unfamiliar with the various types of lending protocols available.”

Therefore, the industry has much work to do to raise awareness by educating the market. “This increased understanding will pave the way for new NFT verticals and integration opportunities.”

According to Derrick Nguyen, marketing and community lead at JPEG’d, another liquidity platform, the desire to unlock value from digital collectibles without selling them is the key driver of the increased interest in NFT lending protocols. He goes on to add that decreased volatility within the market has also made borrowing against collections viable for lenders.

All in all, the process resembles that of borrowing against crypto coins like Bitcoin, but in this case, using NFTs. Some platforms will allow one to borrow up to 60% of the value of the NFT. Interestingly, some of these protocols will also allow a user to buy an NFT on credit by paying a small fraction upfront and the rest over time. Something that has made highly valuable NFTs more accessible to the average collector.

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*All investment/financial opinions expressed by NFT Plazas are from the personal research and experience of our site moderators and are intended as educational material only. Individuals are required to fully research any product prior to making any kind of investment.

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