In the ongoing speedrun to turn everything into a non-fungible token, savvy traders and entrepreneurs have recently taken a few steps to squeeze more investment opportunities out of their JPEGs. From a report: Case in point: it’s now a thing to take out a loan and offer up an NFT as collateral. Take NFTFi, a peer-to-peer lending platform described by Coindesk as a “pawn shop for NFTs.” The core premise is that you can mortgage your NFT in exchange for other crypto that can be sold for cash while keeping your NFT safe — if you can repay the loan. NFTFi told Coindesk it had done over $12 million in volume since its launch in June 2020, with an average loan size of $26,000 and as high as $200,000. As you might expect, crypto-loans backed by JPEGs on the blockchain come with some risk for both parties. Default rates are just shy of 20 percent, the platform told Coindesk. Sometimes, that comes with some pain. The Block recently reported on a trader who borrowed 3.5 ETH (around $12,000) on NFTFi, offering an NFT that had last sold for 3.25 ETH. Over the next three months, the value of NFTs from the same collection skyrocketed to around $300,000 on the low end. On October 10, the loan period ended, the borrower failed to repay the loan, and the NFT — now worth many times more than the original loan — was taken.
of this story at Slashdot.
Source:: Slashdot