•Binance, the largest crypto exchange by trading volume, has added a non-fungible token (NFT) loan feature to its services.
•This product allows borrowers to use their NFT as collateral to borrow cryptocurrency without needing to sell assets.
•The feature utilizes a Peer-to-Pool approach where Binance NFT acts as the loan pool, ensuring a fast and secure experience.
Binance Launches Non-Fungible Token (NFT) Loan Feature
PixabayMany crypto service providers have accelerated efforts to expand their offerings and revenue streams and increase their user base. According to an announcement, the largest crypto exchange by trading volume, Binance, has added a non-fungible token (NFT) loan feature to its services.
NFT Collateralized Cryptocurrency Borrowing With Zero Gas Fees
Binance’s newly launched NFT loan product aims to provide a more accessible solution for NFT holders, allowing them to borrow at competitive interest rates and zero gas fees. In addition, it enables users to borrow Ether without selling their assets. Initially, the product will be available for 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 would introduce the benefits of Decentralized Finance to the Binance NFT community. The exchange also mentioned it would include support for more NFT collections soon.
Furthermore, Binance said it designed this product for users who need quick access to funds but are not ready to sell their prized NFTs. The feature utilizes a Peer-to-Pool approach where Binance NFT acts as the loan pool, ensuring a fast and secure experience. The amount of ETH users can borrow would depend on the NFT collection’s floor price which Ninance would calculate using Oracle Pricing. The Oracle Pricing would use data from various sources including Oracle service provider Chainlink and NFT marketplace OpenSea.
Risks Associated With Loans
At press time, the Binance NFT marketplace has over 90 million users globally and offers many valuable collectibles since it launched in June 2021; steadily expanding its features with initiatives like “Bicasso”– an AI based image generator introduced in March 2021 Beta version . However ,Binance acknowledges risks associated with loans related with highly volatile nature of market leading potential losses when asset values decline ; thus advising users assess risk involved with this new service .
Growth Of Market Cap
Meanwhile ,the growth of market cap in continuing rise in value of these collectibles is growing steadily due largely due increasing demand from investor side .