Binance Unleashes NFT Power: Introducing Binance NFT Loans
Image courtesy of Binance Twitter page
- The Binance NFT Loan feature allows users to borrow Ethereum (ETH) without having to sell their NFTs.
- Binance has added a number of features that make it a one-stop shop for NFT trading and financial services for the community.
In an interesting development, crypto exchange Binance allows users to borrow by placing NFTs as collateral. The platform released a new non-fungible tokens (NFT) lending feature, the first of any major players in the industry.
This lending feature from Binance is specifically aimed at those who need quick funds but don’t want to part with their NFTs. Binance will leverage a “Peer to Pool” mechanism where the Binance NFT platform will act as a lending pool.
In addition, Binance said the platform will offer zero gas fees along with the ability to borrow Ethereum (ETH) without the need to sell assets. When Binance NFT acts as a lending pool, the amount of ETH that users can borrow will depend on the floor price of their NFTs.
Data for the system will come from several sources such as the NFT marketplace OpenSea and the Oracle service Chainlink (LINK). As of now, the Binance NFT lending feature supports four known collections. Commenting on the development, Binance said:
Initially available with select high-profile NFT projects such as Bored Ape Yacht Club (BAYC), Mutant Ape Yacht Club (MAYC), Azuki and Doodles, the innovative feature introduces the benefits of decentralized finance (DeFi) to the Binance NFT community. More collections are expected to be added in the near future.
Binance NFT Eyeing Expansion in the Future
Crypto exchange Binance said it plans to expand its NFT lending services in the future. Mayur Kamat, head of product at Binance, said the new feature should provide new liquidity options for holders. This would “allow them to participate in the market without having to let go of their precious NFTs.” He added:
We have added a number of features that make it a one-stop shop for NFT trading and financial services for our community,
To become the best NFT lending service in the future, Binance will compete with the world’s largest NFT trading platform Blur.
Earlier this month, on May 2, Blur launched Blend – its own peer-to-peer lending protocol for NFTs. Currently, Blue alone dominates a staggering 82% of the entire NFT lending market. Additionally, the platform has recorded over $308 million in loan volume in just the first twenty days of launch, according to data from blockchain data aggregator DappRadar. In an email to Forkast, Brendan Humphries, chief business officer at peer-to-protocol NFT lending platform Pine Protocol, said:
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The continuous nature of Blend’s loans has proven attractive to traders seeking additional leverage. Products like Blend contribute to the continued maturation of the NFT market, increasing market efficiency and making the space more attractive to new entrants seeking sophisticated products and tools.
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