While non-fungible token (NFT) collectibles have become a hot commodity over the last 12 months, a number of NFT owners are taking loans out against their NFTs. This month, a project called Nftfi has facilitated $25.6 million in NFT loans so far, and last month the lending marketplace recorded nearly $50 million in NFT loans.
NFT lending and borrowing continues to grow
NFTs have become a billion dollar industry over the past year and a popular use case for blockchain technology. Even though sales have been dropping lately amid the downturn in the crypto market, NFTs still sell for hundreds of thousands, if not millions of dollars per digital collectible. In addition to NFT sales and auctions, NFT owners also lend their digital collectibles to access cash. For example, a decentralized finance (defi) platform called Nftfi has seen a cumulative lending volume of $185.4 million since the market’s inception.
In the last week, the peer-to-peer marketplace for NFT collateralized loans recorded four loans for more than $100K or more each. On May 16, Bored Ape Yacht Club (BAYC) 7,813 was used for a $100K loan, and Autoglyph 231 was leveraged for a $200K loan on May 12. BAYC 6,276 was used for a $150K loan on May 10, and the BAYC 371 owner was able to obtain a $115K loan for the NFT the day before. So far this month, Nftfi has facilitated $25.6 million in NFT loans, according to statistics from Dune Analytics. Nftfi is also partners with the blockchain firms Flow and Animoca Brands.
NFT Loan Competition
Nftfi is not the only NFT lending platform on the block, as there are others like Arcade, Nexo.io, and Drops. Statistics show that the Drops loan market has facilitated $6,746,515 in loans. Arcade has raised $17.8 million from investors including Pantera Capital, Franklin Templeton Investments, Castle Island Ventures, and Protofund. Another competitor is peer-to-peer NFT lending marketplace Flowty, which is built on the Flow blockchain network. Flowty raised $4.5 million in the company’s first investment round from two lead investors and 23 in total.
Nftfi has a wide selection of NFTs and an assortment from a number of blue-chip digital collectible collections as well. For instance, there are ENS names, Unstoppable Domains, Axies, Doodles, Sanbox land, Otherdeeds, Hashmasks, Bored Ape Yacht Club, and Mutant Ape Yacht Club (MAYC). Just recently the platform phased out its old smart contract (Nftfi V1) on April 4, 2022, and launched a new smart contract called Nftfi V2. According to the web portal, Chainsecurity and Halborn audited the platform’s V2 smart contract.
