Binance's NFT Marketplace has launched an NFT Loan feature, allowing users to borrow ETH using their NFTs as collateral without selling them. The loans, accessible with selected high-profile NFT projects, offer competitive interest rates and zero gas fees, enabling users to unlock liquidity quickly and easily. Users must fully understand the associated risks before using the service despite its advantages. These include price volatility, liquidation risk, and loan term changes.
The new service, called Binance NFT Loan, "will allow people to use blue-chip NFTs to borrow crypto, starting with ETH, introducing the benefits of DeFi to the Binance NFT community," Binance said in a press release. According to the platform, the tool offers competitive interest rates, instant liquidity, zero gas fees, and liquidity protection.
According to the platform, the tool offers competitive interest rates, instant liquidity, zero gas fees, and liquidity protection. It uses a "Peer-to-Pool" approach where Binance acts as the loan pool.
The feature, launching on Friday, will initially support Ethereum loans only and NFTs from Bored Ape Yacht Club (BAYC), Mutant Ape Yacht Club (MAYC), and Azuki and Doodles collections. The platform plans to roll out new options in the future.
Mayur Kamat, head of products at Binance, said in a press release that the new feature will provide new liquidity options for holders, "allowing them to participate in the market without having to let go of their precious NFTs."
"We've added a host of features that make it a one-stop shop for NFT trading and financial services for our community," said Kamat.
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