With its most recent release, Binance, the biggest cryptocurrency exchange in the world, made ripples in the non-fungible token (NFT) market. The exchange's NFT marketplace, which was launched in April 2021 and has enjoyed tremendous success since then, unveiled a new NFT lending tool on Thursday. Through the Binance NFT market, users can now borrow cryptocurrencies using NFTs as collateral.
NFT Lending Launching By Binance
The practice of NFT lending is quickly gaining traction in the cryptocurrency community, giving consumers a fresh method to diversify their portfolios and get the most out of their online assets. At the moment, the NFT market allows for the borrowing of Ether (ETH) against flagship NFTs, such as the Bored Ape Yacht Club (BAYC), Mutant Ape Yacht Club (MAYC), Azuki, and Doodles collections. Users have flexibility in choosing collateral that matches their interests and investing strategies because to this wide range of possibilities.
NFT loans on the Binance platform have an annual interest rate of 7.91%, according to the official website. The available loan-to-value ratios range from 40% to 60%, ensuring a fair distribution of borrowed money and collateral. Notably, in order to further entice end users, Binance exchange has abolished gas prices for all transactions related to the loan process.
Growing NFT Ecosystem on Binance
This big advancement comes after Blur, a significant player in the NFT marketplace industry, recently introduced Blend, a lending protocol for NFTs. Blend gives lenders the freedom to choose their own interest rates and loan-to-value ratios, giving market participants much-needed flexibility.
Additionally, the launch of NFT lending on Binance presents a win-win situation for lenders and borrowers alike. An excerpt from their blog entry reads as follows:
"Owners can lend relatively illiquid non-fungible tokens (NFTs) for instant crypto or cash funds, while borrowers can earn interest on the NFT without owning it."
Additionally, Binance has been taking calculated actions to surpass its rivals and firmly establish its supremacy in the NFT sector. The exchange already supports Ethereum, Polygon, and its own native BNB Chain, and earlier this month it added support for Ordinals, a Bitcoin-based NFT.