Counter brings BNPL to NFTs when market weakens

The NFT market is flatlining, the DeFi lending market has seen some major bankruptcies, and bitcoin has fallen below $ 20,000 regularly in a month. Perfect time to start a purchase now, pay later (BNPL) lending market for non-fungible token (NFT) collectibles.

In fact, cryptocurrency lender Teller’s new BNPL marketplace is not a big risk – for Teller – even if the timing is about a year later than prime time in the market for advanced NFTs like CryptoPunks and Bored Ape Yacht Club avatars that have sold for six and up. and with seven figures.

See also: NFT Series: NFTs Target Collector Market With Avatars, Celebrities

This is because Teller Finance, a start-up of decentralized finance (DeFi) lending protocol, does not issue any NFT-supported loans itself.

While Teller’s main business is to connect borrowers with more traditional crypto lending pools that offer loans with low or no security based on credit scores outside the chain and other information, in the case of the offer “Ape Now, Pay Later” it has built what corresponds to an open order book BNPL lending market . Individual lenders are linked to potential buyers of high-end NFT collectibles – limited to 10 “blue chip” NFT collections – who want to pay over time.

The BNPL terms start with a down payment of 25% to 50%, and then give buyers up to 90 days to repay the loan and receive NFT. If they default, the lender can seize the down payment and sell NFT, with the potential buyer receiving residual funds after the sale.

But if NFT’s price thinks too badly, the lender is unlucky.

Teller also does not set the terms for the loan: the lender and buyer set the terms, including the repayment schedule and APR, which can run as high as 30%.

“Buying NFTs is one of the core things Web3 consumers want to do right now,” Ryan Berkun, founder and CEO of Teller Finance, told Decrypt. “Buy now, pay later is a simple matter.”

No Brainer

While a number of other companies are investing in the NFT market – both GameStop and Reddit launched NFT marketplaces in recent weeks – Berkun’s opinion that NFT investments are a “no-brainer” is debatable.

First, while Bored Ape Yacht Club (BAYC) NFTs still bring in high prices with a floor price – meaning the lowest price offered for any chain monkey, which varies widely based on rarity and other design features – they are still down almost 40% from the record in April. And collectibles sales are far rarer, falling from a highest level in January at 40,000 to 50,000 daily to 5,000 on Wednesday (July 13).

Secondly, the lending market is generally preparing for tough times.

Although this certainly applies to cryptocurrencies, where another large insolvent lender, Celsius, went bankrupt in Voyager Digital on Wednesday, it is also happening in the wider market as banks and other financial institutions are preparing for a sharp recession.

Read more: Crypto Lender Celsius files for Chapter 11 bankruptcy

JPMorgan Chase revealed on Thursday (July 14) that it has increased its loan default reserves by $ 10.5 billion – an order of magnitude greater than the $ 900 million it set aside in April – despite deep cuts in earnings for Q2 2022, which was $ 4.7 billion despite higher-than-expected revenues.

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