On May 25, Web3 marketplace Binance announced it will allow NFT owners to use their digital assets as collateral to secure loans in Ethereum. Named Binance NFT Loan, the new service is aimed at bringing the advantages of decentralized finance (DeFi) to Binance’s NFT community, letting users unlock the potential of their NFT holdings without needing to sell them and provide a solution for liquidity needs in the process.
Launching May 26, the service will initially cater to Ethereum loans only and will accept NFTs from select collections such as Bored Ape Yacht Club (BAYC), Mutant Ape Yacht Club (MAYC), Azuki, and Doodles. However, Binance has plans to expand the service to include more collection and borrowing options in the future.
Binance NFT Loan comes with several features for users, including competitive interest rates, immediate liquidity, and zero gas fees. A unique aspect of the service is its “Peer-to-Pool” approach, in which Binance acts as the pool for the loans.
“Binance’s continued evolution and expansion in the NFT domain is a testament to our commitment to providing diverse offerings and services to our community,” Mayur Kamat, the Head of Product at Binance, said in a press release.
Kamat has also stated that the new feature will provide an array of liquidity options for NFT owners, which will allow them to more effectively participate in the Web3 ecosystem without parting ways with their valued NFTs.
Keeping up with Web3 trends
In recent months, Binance has made a concerted effort to stay at the forefront of the evolving crypto and NFT landscape. In March, it launched a beta for Bicasso, an AI-powered NFT generator.
Access instant liquidity from your NFTs with #Binance NFT Loan!
You can now secure crypto loans using your NFTs on @TheBinanceNFT Marketplace, with zero gas fees, low interest rates and liquidation protection.
Find all the details below.
— Binance (@binance) May 26, 2023
Binance’s NFT borrowing capabilities come just weeks after Blur, the number one NFT marketplace and aggregator in the NFT space, announced its own borrowing and lending capabilities. Blur has seen massive success with the move and is now the number one NFT lending provider by market share.
The intersection of NFTs and DeFi is likely to grow further throughout 2023 as platforms and builders in the space continue to explore ways in which the nascent Web3 market can evolve and sustain itself in the long term.