The market and utility of non-fungible tokens (NFT) continues to expand. From works of art, music, games Play2Earn, tokens of famous athletes, to loans for digital collectibles that exceed $ 1 million.
This last case, emerged in the market for p2p loans with NFT called NFTfi. User KrypToniK pledged his Autoglyphs NFT as collateral, for which he received the equivalent of $ 1.4 million in DAI stablecoin.
Autoglyphs NFTs are a unique, code-driven, generative art experiment running on the Ethereum blockchain. Only 512 NFTs of this type were made and it can be purchased through the secondary market.
The NFT involved in the loan is # 488, type 10, considered more rare and valued in OpenSea at 2.5 ETH, which represents about $ 11,253 at the current market price, according to the CriptoNoticias price index.
The borrower received the funds on October 28 and has until November 27 to repay the loan and recover his NFT. If you are unable to pay, the NFT is available for foreclosure by the lender.
However, NFTfi, market launched in 2020, uses something known to the art world as ‘no recourse loan’, that means the lender does not have to foreclose immediately, but if they do, the NFT will be transferred to their account and you will waive your claim for the outstanding loan amount.
NFTs of all kinds can be offered in the loan market, such as those from Axie Infinity, Gods Unchained, CryptoKitties, Art Blocks, SuperRare Bored Ape Yacht Club and more.
How to order or lend through NFTti?
This market allows borrowers to put assets as collateral for a loan and lenders make offers to lend in exchange for interest, NFTti explains on its blog.
In the case of users who want to request loans, they can do so by leaving any NFT as collateral, while waiting for other users to offer a loan.
Upon finding a lender, they will transfer ether (ETH) to the borrower’s account and their NFT is locked under a smart contract provided by NFTfi. Once the loan is paid off, the NFT will be returned to its owner.
For users who are interested in lending, NFTti explains that they will be able to explore the platform to locate the collectibles that most attract their attention and offer loans on any of those digital assets.
“Worst case scenario: the borrower defaults and you get the asset,” says NFTfi.
Importancia del wrapped ether para NFTfi
On the platform you can borrow only in the DAI stablecoin and in wETH, which is nothing more than a wrapped ether or a “wrapped ether” that is tied to the price of a traditional ether (ETH) on the Ethereum network. The wETH is a type of ERC-20 token that facilitates exchange operations on decentralized platforms.
The company explains that it prefers to use wETH in its operations, because it has “multiple benefits in the context of NFTfi.” One of the advantages is that the ERC-20 standard allows the NFT holder to grant permission to other Ethereum accounts to spend their tokens, making it easier for the platform to “move the wETH during the initial loan process and repay the loan”, highlights NFTfi.