Binance Marketplace, cryptocurrency giant Binance’s non-fungible token (NFT) trading platform, has unveiled a new service where users can borrow Ethereum (ETH) by using their NFTs as collateral.
Since its inception, NFTs have taken the world by storm. Multi-billion dollar companies such as Samsung, Adidas, Coca-Cola, and Gucci among others have already integrated digital collectibles into their business module to better interact with and serve their customers. As per Dappradar, over the past 18 months scores of companies from across the world have strongly pursued their interest in the world of NFTs. In the recent few years, the NFT space has become one of the most significant areas of growth in the world of blockchain technology.
Binance becomes the latest company to join the bandwagon, offering NFT loans. With this move, the crypto exchange aims to compete with the world’s largest NFT trading platform Blur’s “Blend”, its own peer-to-peer lending protocol for NFTs. Launched earlier this month, Blend allows lenders to set their interest rates and loan-to-value ratios. Blend dominates 82% of the entire NFT loans market recording over $308 million in loan volume in the first 22 days after launch.
We are excited to announce our latest product, the Binance NFT Loan.
Get instant liquidity with your selected blue-chip NFTs.
🔶 Instant Borrowing
🔶 Zero Gas Fees
🔶 Liquidation Protection
🔶 Competitive Interest RateRead the blog for more details:
— Binance NFT (@TheBinanceNFT) May 25, 2023
A New Entrant Joins NFT Loans Space
According to the official press release, the Binance NFT marketplace would offer this service through a peer-to-peer approach and would have pools for loans. Initially, the service will support Ethereum (ETH) loans only against “blue-chip” NFTs, such as Bored Ape Yacht Club (BAYC), Mutant Ape Yacht Club (MAYC), Azuki, and Doodles. Binance wrote,
“The Binance NFT Loans will allow people to use blue-chip NFTs to borrow crypto, starting with ETH, introducing the benefits of DeFi to the Binance NFT community.”
Furthermore, as per the Binance NFT website, the platform is keeping the annual interest rate at 3.36% and will later increase it to 11.20%. The loan-to-value ratio is 40% for Doodles, 50% for Azuki and MAYC, and 60% for BAYC collections.
The recent announcement also revealed that the Binance NFT marketplace is offering a discount during the launch of the loan feature. The users who will be securing an NFT loan will be getting a 70% discount on the current borrowing interest rates. There is no specified time mentioned for when this offer would end.
Binance Assists US Authorities To Crackdown Illicit Revenue
The move comes shortly after the crypto behemoth revealed that it had assisted US authorities in seizing more than $4.4 million linked to North Korean criminal groups. Binance noted its investigation teams worked with law enforcement agencies in the US to disrupt illicit revenue generation activities of approximately four, now-sanctioned, entities within North Korea.
We are proud to have assisted US law enforcement in seizing $4.4M and freezing accounts linked to North Korean organized crime.
Kudos to our law enforcement partners and the Binance Investigations team for their unwavering commitment to combating crime worldwide.
— Binance (@binance) May 24, 2023
