The non-fungible token market has made huge strides over the past few years. However, nothing symbolizes this maturity more than the rapidly growing NFT lending market. Several projects have taken on the task of building the infrastructure that provides liquidity for highly liquid NFT companies. As a result, borrowing against NFT holdings has now crossed the $1 billion mark.
This number comes from eight NFT liquidity providers, with nftfi leads the way, according to Dune Analytics. As of April 13, it has seen more than $392 million borrowed on its platform. Follow him closely Pendaw With over $300 million in second place, and Paraspace It ranks third with just over $241 million. The latter is a relatively new entry in the NFT liquidity market, promising to shake up the enterprise. Incredibly, the number of borrowers has also increased over the past few months, and is currently cumulatively over 40,000.
NFT borrowing will become huge over time
However, as more NFT holders learn about the existence of these platforms, the number is expected to grow exponentially. It’s a sentiment shared by Andrej Skraba CMO at NFTfi. Speaking to the press, he notes, “Currently, many digital asset holders are either unaware of the existence of credit markets or are unaware of the different types of lending protocols available.”
Therefore, the industry has to do a lot of work to raise awareness by educating the market. “This increased understanding will pave the way for new sectors in NFT and integration opportunities.”
According to Derek Nguyen, Marketing and Community Lead at JPEG’d, another liquidity platform, the desire to unlock value from digital holdings without selling them is a key driver of the growing interest in NFT lending protocols. He adds that the low volatility in the market has made borrowing for collection viable for lenders.
In general, the process is similar to borrowing against cryptocurrencies like Bitcoin, but in this case, using NFTs. Some platforms allow a person to borrow up to 60% of the value of the NFT. Interestingly, some of these protocols will also allow the user to purchase NFT on credit by paying a small portion upfront and the rest over time. something made High value NFTs More accessible to the average collector.
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*All investment/financial opinions expressed by NFT Plazas are derived from the personal research and experience of our site managers and are intended as educational materials only. Individuals are required to fully research any product before making any type of investment.
Bassel is a huge fan of blockchain technology and all its innovations, and is excited to share this narrative with his audience. He has spent over five years in the coding field, specializing in researching and creating Web3 content for various media outlets around the world.