Get loans using NFTs as collateral with NFT loans

• Now you can use your NFTs as collateral to get loans.
• Many crypto exchanges provide NFT loans. The top 4 are mentioned below.

NFT Loans are modern-day loans that are provided by keeping an NFT as collateral. Yes, Now you can use NFTs as collateral. This new initiative has been launched by one of the most popular crypto exchanges. On this exchange now you can borrow ETH by using your valuable NFTs as collateral. it seems a very favorable option to get money. But users should also consider the risks associated with using NFTs as collateral.

These risks can be price volatility, long-term changes, and liquidation risk. This exchange has also introduced this new feature with the special purpose to provide some liquidity to the owners of the NFTs based on collateral-based loans.

NFT Loans

This service is a very new and innovative service available in the market. with the help of this service, you can utilize NFTs as collateral to borrow Ethereum. This service came into the market recently. In May 2023, The largest crypto exchange announced this. it also announced some selected blue-chip NFT projects that can be kept as collateral. 

Currently, it only supports a limited no. of NFT projects that are most trustable to the network. It has included Bored Ape Yacht Club (BAYC), Mutant Ape Yacht Club, Doodle, and Azuki NFTs.

Pros and Cons of NFT Loans Lending

Pros

By choosing loans as assets you don’t need to keep any physical asset as collateral to get a loan. 

You will be able to get money in the form of cryptocurrency. If you are a crypto trader and need some currency to trade or invest, then you should try an NFT Loans. With this, you do not require extra effort to first convert fiat money into crypto. You can also take advantage of the market price fluctuations.

Cons

You will have to lose all the NFT Loans holder benefits.

This also comes with a risk of losing the asset if you are not able to repay the loan on time. This is a common risk associated with all types of loans.

Lenders will be at risk of losing money if the asset is overvalued.

Top NFT Loans Platforms in 2023

NFTFI

This platform provides wETH, DAI, or USDC by using NFTs as collaterals. The special thing about this platform is that it charges 0% borrower fees and No auto liquidation.

The platform has a total loan volume of $450M+ and the total number of loans it has provided is 45K+

Arcade

This is another popular loan platform that has a total loan volume of $101,315,874. Arcade helps users to leverage their NFTs for loans. The protocol it uses enables Oracle free and peer-to-peer lending with fixed terms.

NEXO

This company has been in the market since 2018. It claims that it has 6M+ users worldwide and supports 60+ cryptocurrencies. It has strategic partnerships with Circle, Blockchain.com, and Brave. Antoni Trenchev is its Co-Founder and Managing Partner

ZHARTA

This is an NFT Loans platform that calls itself borrower-friendly and promises No Auto-Liquidations. This platform also promises fair valuation. it values assets based on rarity and provides appraisals on the basis of floor values. It also customizes the loan condition to fit the conditions of the borrower.