Binance Launches Non-fungible Token (NFT) Lending Feature
Many crypto service providers have accelerated efforts to expand their offerings and revenue streams and grow their user base.
According to one announcementthe largest crypto exchange by trading volume, Binance, has added a non-fungible token (NFT) lending feature to its services.
The cryptocurrency exchange will allow borrowers to use NFTs as collateral to borrow cryptocurrency without having to sell assets.
This development could be part of Binance’s expansion plans.
NFT Collateralized Cryptocurrency Loans with zero gas fees
Binance’s newly launched NFT lending product aims to provide a more accessible solution for NFT holders, allowing them to borrow at competitive interest rates and zero gas fees.
Additionally, it allows users to borrow Ether without selling their holdings.
Initially, the product will be available to holders of profile NFT collections such as Bored Ape Yacht Club (BAYC), Azuki, Mutant Ape Yacht Club (MAYC) and Doodles.
According to Binance, this innovative feature will introduce the benefits of decentralized finance to the Binance NFT community.
The exchange also mentioned that it will soon include support for more NFT pools.
Furthermore, Binance said it designed this product for users who need quick access to funds but are not ready to sell their precious NFTs.
The feature uses a Peer-to-Pool approach where Binance NFT acts as the lending pool, ensuring a fast and secure experience.
The amount of ETH users can borrow will depend on the NFT collection floor price, which Ninance would calculate using Oracle Pricing.
Oracle Pricing will use data from various sources, including Oracle service provider Chainlink and NFT marketplace OpenSea.
Risks associated with NFT loans
At press time, the Binance NFT marketplace has over 90 million users globally and offers many valuable collectibles.
Since Binance launched its NFT platform in June 2021, the exchange has been constantly expanding its features.
In March, Binance unveiled the beta version of an AI-based NFT image generator called “Bicasso”.
Although Binance has a vast experience and user base in NFT staking and other DeFi-related offerings, it acknowledged the risks associated with NFT lending.
The NFT market is highly volatile and can lead to potential losses when asset values decline.
Therefore, the exchange advised users to consider the risks associated with this new service.
Meanwhile, the NFT market cap has continued to grow as it stands at $3,500,191,542.48 at press time.
The market’s sales volume has also reached $32,631,070.55, but shows a decrease of 7.84% in 24 hours.
NFT’s total sales are at 59,060, down 19.98% in 24 hours, with MutantApeYachtClub still leading the pack in all metrics except 24-hour sales volume.
