25 May 2023 22:04, UTC
Reading time: ~3 m
- Binance is releasing an NFT lending feature.
- The new feature plans to give NFTs more utility.
- Binance’s new feature directly rivals Blur’s NFT lending protocol Blend.
In the fiercely competitive landscape of NFT marketplaces this year, platforms like Blur have set the bar high, pushing other marketplaces such as OpenSea, Magic Eden, and LooksRare to compete for relevance. Now, Binance looks to intensify the race for dominance with its entry.
Throughout this year, Binance has been actively expanding its NFT offerings, experimenting with different initiatives, including generative AI. In a strategic move to establish its presence in this high-octane atmosphere, Binance has unveiled a feature that directly rivals the leading platforms in the space.
On May 25, Binance marked its entry into the NFT lending space by unveiling a new feature on its platform that allows users to secure loans using NFTs as collateral.
The new feature, called Binance NFT loan, aims to add utility to NFTs by allowing people to use their assets to borrow crypto. The feature comes shortly after NFT marketplace giant Blur launched its NFT Lending protocol called Blend earlier in May.
However, unlike Blur, Binance uses a “Peer-to-pool” mechanism where its platform acts as a loan pool.
We are excited to announce our latest product, the Binance NFT Loan.
Get instant liquidity with your selected blue-chip NFTs.
🔶 Instant Borrowing
🔶 Zero Gas Fees
🔶 Liquidation Protection
🔶 Competitive Interest Rate
Read the blog for more details:
— Binance NFT (@TheBinanceNFT) May 25, 2023
Initially, Binance will only support Ethereum loans and “Blue Chip” NFT collections, including Bore Ape Yacht Club (BAYC), Mutant Ape Yacht Club (MAYC), Azuki, and Doodles. The exchange has shared that it plans to introduce more features in the future that would make Binance the “one-stop shop for NFT trading and DeFi.”
Mayur Kamat, head of product at Binance, shared in a press release.
Binance NFT loan feature will provide new liquidity options for holders, allowing them to participate in the market without having to let go of their precious NFTs.”
Initially, interest rates are fixed at 3.36% per annum; however, Binance will increase rates to 11% later. According to the platform, the loan-to-value ratio ranges from 40% to 60%
On the Flipside
- In April, Peck Shield reported that $3 million of NFTs were stolen, and 70% of them were sold on Blur.
- The crypto community had blurred reactions to Blur’s new lending protocol Blend. They shared skepticism about the platform’s auctioning process.
Why This Matters
Binance’s new feature could shake up the competition and change how NFTs. The new NFT loan feature evolves NFTs from being typical ‘jpegs’ to properties that can be used as collateral. This is a big step forward for NFTs and could entice other platforms to follow suit.
Read the full article here