Once fashionable (and still is for some), NFTs have become a digital asset that reflects the real world. It is increasing. Popular in and around the crypto world.
But large sums of capital are locked into ellipseed NFTs, and many people are looking for ways to open liquidity without selling NFTs..
The market is targeted by a South African company, NFTs, and has raised $ 5 million to continue its NFTs financial pioneering. Leading Crypto Fund led the 1kx round, with Ashton Cutters Sounds Ventures, Maven 11, Scalar Capital, Kleiner Perkins and others..
Founded by Stephen Young February 2020 NFTfi It serves as a marketplace for users to get cryptocurrency loans on NFTs and to lend to borrowers in terms of NFTs.. In other words, users can use their NFT as collateral to get loans from other users in a decentralized and peer-to-peer system.
For example, if a user comes to the forum to borrow $ 10,000, different lenders offer different interest rates and payment terms to the borrower..
In the meantime, the borrower must submit NFT as part of the transaction. When the transaction made upWhen the borrower receives the money, NFT is transferred to the NFTfi Smart Contract (no one, including the NFTfi team) can use it..
If the loan is repaid with interest to the lender, the NFT will be returned to the borrower’s wallet. If the loan is not repaid within the allotted time, the lender will receive the NFT.
In the traditional art world where NFTfi users lend money to artists in banks, large galleries or auction houses, it is common practice to check whether or not NFT loans are being paid..
NormallyIn the traditional market, loans are about 50% of the value of the artwork. At the NFTfi forum, lenders conduct assessments and provide creditors with up to 50% of their NFT value as a principal.
Therefore, if the NFT borrowed $ 20,000 when the borrower needed it, lenders could lend no more than $ 10,000. Interest rates, in spiteIt varies according to the lender and the property. NTFfi reduces lenders interest by 5% on each loan, but by default it does not work.
There is danger on both sides, though. Borrowers have some time to repay their loans before taking out NFTs, and lenders can at last Take low cost NFTs.
“That’s why lenders want to have a certain place between the value of the property and the loan,” Young said on NTFfi about the volatility between lenders and borrowers.. This is because when a person rejects, they have to sell for less than the market price and the price goes down. in between. That is why they need such a large bond between the cost of the loan and the value of the real estate.
Currently, about 20% of the loans on the platform are discontinued, but according to Young, most of them are low-cost loans. The reason behind this is that high-value NFTs are unique and difficult to come by and users hope to cover loans. to find NFTs.
“Many lenders do not care about default because they often lend only the assets they want to add to their collection. So when you get a default, they get it Save the assets or list 75% of the total market value and you can actually make more profit on defaults than real loans. ”
While NFTfi may seem like an advantage for lenders, Young says it is not. But the forum is working to solve that hypothesis by including features that allow time negotiation and extensions for borrowers..
Maximum NFT Loans on NFTfi Extended in popular digital collections on the Ethereum blockchain – Friends of Art Blocks, Borebore Monkey Boat Club, Crippenks, Autogliffs, Mbitts and V. NFTfi has entered its first loan. More than 1,500 have been in attendance since May 2020 and since.
Young Claims NFTfi is growing by 80% per month. in terms of The loan amount and the value of the company reached more than $ 26.5 million. The company said lenders earned more than $ 500,000 in interest.
Before the launch of NFTfi, Young was a co-founder and chief product officer at Coindirect, cryptocurrency exchange and OTC Desk, before digital assets became more popular in the early stages of the CVD-19 epidemic..
Last year, it raised $ 890,000 for NTFF seed, raising a team in South Africa to produce and produce its products. Most of the group still lives in Africa; in spite, The company is now included in the British Virgin Islands for respect and control reasons, Young said.
With the new cash, NFTfi plans to grow the team, launch new product features, expand the platform to other blockchains, and invest in the community. And financially decentralize decentralization.
Starting with a group of friends, their NFTs went into flight – secured loans and some spreadsheets. Completely A decentralized forum, one of the young people’s hopes will have a greater impact on the NFT world.
“Our main focus is on the NFTs. What DeFi has done for cryptocurrencies. And ReallyWe want to make such an incentive for the NFT market, by opening a specific value in these NFTs so that you can do so. Plowing Back to the NFT community and market to further develop the space. ”