Binance Launches NFT Lending Feature to Rival Blur Marketplace
Binance, the world’s leading cryptocurrency exchange, continues to make waves in the NFT space with its latest announcement. On Thursday, the exchange’s NFT marketplace, which has experienced remarkable success since its launch in April 2021, introduced a new NFT lending feature. With this, users can now borrow cryptocurrencies using NFTs as collateral within the Binance NFT marketplace.
Binance Launches NFT Lending
The trend of NFT lending is rapidly gaining popularity in the crypto space, offering users a new way to diversify their portfolios and maximize the potential of their digital investments. Currently, the NFT marketplace supports Ether (ETH) lending against flagship NFTs, including notable NFT collections such as Bored Ape Yacht Club (BAYC), Mutant Ape Yacht Club (MAYC), Azuki, and Doodles. This diverse range of options gives users flexibility in choosing security that suits their preferences and investment strategies.
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According to the official website, NFT loans on the Binance platform have an interest rate of 7.91% per annum. The loan-to-value ratio offered ranges from 40% to 60%, ensuring a fair balance between collateral and borrowed funds. In particular, Binance Exchange has waived gas fees for all transactions related to the lending process, to further entice end users.
Binance’s growing NFT ecosystem
This significant development follows the recent launch of Blend – a lending protocol for NFTs by Blur – a prominent player in the NFT market industry. Blend allows lenders to set their own interest rates and loan-to-value ratio, which provides much-needed flexibility for market participants.
Moreover, the introduction of NFT lending on Binance offers a win-win scenario for both lenders and borrowers. An extract from their blog post implies that:
Owners can lend relatively illiquid non-fungible tokens (NFT) for immediate crypto or cash funds, while borrowers can earn interest on the NFT without owning it.
In addition, Binance has taken strategic steps to outgrow the competition and strengthen its dominance in the NFT market. Earlier this month, the exchange announced support for Ordinals, Bitcoin-based NFTs, in addition to its existing blockchain offerings, which include Ethereum, Polygon and its native BNB Chain.
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