Binance NFT is releasing an exciting new product today. The world’s biggest crypto exchange is expanding its NFT platform with the addition of NFT Loan. What is Binance’s new program all about?
What is Binanace’s NFT Loan program?
Binance will now allow blue-chip NFT holders to use their prized digital assets as collateral for loans. This allows these holders to unlock liquidity in their NFT portfolios without having to sell anything. Not only does this new feature allow for quick and easy liquidity, but it also allows NFT holders to execute swing trades without having to worry about incurring a taxable event on an expensive NFT.
The new program currently supports only a handful of leading NFT collections. These projects include Bored Ape Yacht Club, Mutant Ape Yacht Club, Azuki, and Doodles. Binance expects to add more collections to its offerings soon, but has not published any specific info on the matter.
The service features competitive interest rates and does not require expensive Ethereum gas fees. This blending on NFTs and DeFi offers greater flexibility and utility to NFTs. Unlike IRL things like houses or cars, digital assets can now be used to get instant lines of credit without weeks of applications and tedious underwriting.
Mayur Kamat, the Head of Product at Binance, wrote, “Binance NFT is building! With the addition of a host of features, we are striving to become the go-to platform for NFT trading and financial services. We not only offer low fees and the security of Binance but now also provide NFT Loans, a new form of liquidity for NFT holders. This enables them to engage in the market without parting with their valued NFTs.”
How does NFT Loan work?
The program provides interest rates via a “Pear to Pool” approach. Binance NFT functions as the pool for loans, and loan customers can then select specific offers that fit their needs. It relies on Chainlink and OpenSea to determine different NFT projects’ floor prices.
Binance continues to disrupt despite dominating a huge share of the crypto industry’s market share. By offering loan services to its customers, it continues to be an innovator in the space.
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