Binance’s NFT marketplace has recently unveiled a new functionality that enables users to borrow cryptocurrencies by leveraging NFTs as collateral. This development marks the platform’s entry into the NFT lending space. According to a recent announcement, the Binance NFT marketplace currently supports ether (ETH) borrowing against notable NFTs like Bored Ape Yacht Club (BAYC), Mutant Ape Yacht Club (MAYC), Azuki, and Doodles.
To provide more details, the current interest rate for NFT loans on the Binance NFT marketplace is set at 7.91% per annum, and the loan-to-value ratio ranges between 40% and 60%, as stated on the Binance NFT website. Notably, users won’t incur any gas fees or Ethereum transaction charges when utilizing this feature.
Binance initially introduced its NFT marketplace in April 2021, officially launching it in June of the same year. In a recent update, Binance NFT announced its intention to support Ordinals, Bitcoin NFTs, adding to its existing blockchain offerings of Ethereum, Polygon, and its native BNB Chain.
The introduction of the NFT loan feature by Binance NFT follows closely on the heels of Blur, a prominent NFT marketplace, which launched its NFT lending protocol named Blend earlier this month. Blend distinguishes itself by allowing lenders to establish their own interest rates and loan-to-value ratios, as highlighted by analyst Brad Kay from The Block Research. Kay states, “Blend’s meteoric rise in the NFT lending market is undeniable. As it continues to break new ground, the protocol is proving that a market-driven approach can successfully revolutionize the lending landscape.”