Binance Unveils Its NFT Lending Program
In Brief
Binance unveiled its lending program for Ethereum NFTs.
Through the program, NFT holders can borrow predetermined amounts of ETH by putting their NFTs in peer-to-pool loans. Loans must be over-collateralized.
Binance, the largest cryptocurrency exchange by trading volume, has announced its Ethereum non-fungible token lending program. Borrowing certain amounts of ETH is possible through the peer-to-pool loan mechanism that uses NFTs as collateral.
Non-fungible token holders must over-collateralize their loan with their non-fungible tokens, meaning that the value of their NFT exceeds the amount of money they are borrowing. The loan period extends indefinitely.
A loan can be liquidated on the condition of “health factor,” which Binance has defined as: “Health factor = (NFT floor price * liquidation threshold) / debt with interest.”
If the floor price of the NFT collection, multiplied by the liquidation threshold, reaches the level of debt and interest left on the loan, liquidation occurs. The loan enters a liquidation process, which occurs through a Dutch Auction when the health factor reaches “1.”
At the moment of writing, the program supports blue-chip NFT collections Bored Ape Yacht Club, Mutant Ape Yacht Club, Doodles, and Azuki.
“We already have low fees and the Binance peace of mind. Now, NFT Loans will add a new form of liquidity for NFT holders, allowing them to participate in the market without having to let go of their precious NFTs,” said Mayur Kamat in a press release.
The lending program is similar to NFT marketplace Blur’s in terms of application. Potential borrowers may benefit from the loan’s perpetual term.
Read more related articles:
- Blue-chip NFT project Azuki introduces the Physical Backed Token
- Magic Eden Unveils ETH Genesis, its Ethereum NFT Marketplace in Beta
- Vivienne Tam Brings Blue-Chip NFTs to New York Fashion Week
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About The Author
Valeria is a reporter for Metaverse Post. She focuses on fundraises, AI, metaverse, digital fashion, NFTs, and everything web3-related. Valeria has a Master’s degree in Public Communications and is getting her second Major in International Business Management. She dedicates her free time to photography and fashion styling. At the age of 13, Valeria created her first fashion-focused blog, which developed her passion for journalism and style. She is based in northern Italy and often works remotely from different European cities. You can contact her at valerygoncharenko@mpost.io
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Valeria is a reporter for Metaverse Post. She focuses on fundraises, AI, metaverse, digital fashion, NFTs, and everything web3-related. Valeria has a Master’s degree in Public Communications and is getting her second Major in International Business Management. She dedicates her free time to photography and fashion styling. At the age of 13, Valeria created her first fashion-focused blog, which developed her passion for journalism and style. She is based in northern Italy and often works remotely from different European cities. You can contact her at valerygoncharenko@mpost.io
