সরাসরি প্রধান সামগ্রীতে চলে যান

USING AN NFT AS COLLATERAL FOR A LOAN



 NFTs (non-fungible tokens) are one of the most fascinating aspects of the blockchain industry. In the last 2-3 years, people have been recognising their value, with some even elsling for around $70 million. The NFT market is now its own distinct thing, with more than $2 billion being traded. Considering the value that these tokens are worth, some have been left asking whether they can be used as collateral for a loan? And the answer to this is a resounding yes, although there are some factors to keep in mind.

 

Finding a Suitable Lender

 

Just like when using physical artifacts such as paintings for collateral, you will need to find somebody that will accept your NFT in exchange for money. There are two options for doing this. You could either find a DeFi lending service or a CeFi service. However, it is probably best to find a CeFi service, as NFTs are unique and distinct, and it can help to get another human to evaluate them, rather than using an automated service that might not understand its value. Even if an NFT is generated via an automated program, such as how Cryptokitties are made, this does not mean that a separate program will know how to properly assess its value. A fantastic example of this is the Hasmasks NFT project; each NFT is generated via code, but some NFTs have unique features that the program could not have predicted. In these circumstances, a program would have no idea of its value or worth because those unique elements are designed to be appreciated exclusively by the human eye.

 

Finding a CeFi,human-based,  lending service or platform would be the best option for NFTs. Beauty is subjective, and when it comes to art, so is value. These are unlike cryptocurrencies in that their worth cannot be deterministic.

 

Helio Lending now offers the ability to use NFT as collateral for a loan. Head to https://heliolending.com/real-estate-nft/ to find out more.

 

Calculating the worth of an NFT

 

This is complex, as each NFT will have a different price than the next, and different people will be willing to pay different amounts for the same piece. A dialogue would need to be opened between the lender and the borrower, where they both negotiate a reasonable price. This could take some time, and it may take some trial and error when trying to find the right lender who truly understands the value of the piece. For this reason, be sure to contact more than one place or person.

 

One thing to consider is that NFTs can increase in value. The industry is fresh and rapidly moving, and sometimes an NFT from an early adopter can skyrocket in price as the market expands and matures. Make sure that you discuss with the lender what would happen if the value rises during the loan period, as some lenders may ask you to pay more to get the NFT back. Sketching out the terms for this is especially important if the price of the NFTs you own is calculated by an algorithm, such as how Berry Cards work on the NEAR protocol.

 

No Different than Using Physical Art as Collateral

 

Physical paintings, sculptures, books, and other mediums of art have been used as collateral for as long as humans have been making art. And using NFTs as collateral is no different. It fits a model closer to how pawn brokers operate, although via more technological means.

 

As the NFT market grows, and their value continues to develop, expect more lenders to accept them as collateral. If you work with a CeFi crypto lending service aadlrey, it may be worth reaching out and asking if they would consider using an NFT to collateralize a loan.

https://heliolending.com/


লেবেলসমূহ:

মন্তব্যসমূহ

একটি মন্তব্য পোস্ট করুন

এই ব্লগটি থেকে জনপ্রিয় পোস্টগুলি

The Influence of Crypto Lending

  The practice of lending money has been and continues to be one of the driving forces behind the modern economy. Since debt first became a facilitator for trading, it has been considered a significant component in commerce and investment.   With all this clout, it didn’t take long for the practice to make its way into the crypto market. Since around 2010, the potential establishment of “bitcoin banks ” has become a popular topic among numerous forums. Not too long after, people started offering P2P lending services to extract returns on their holdings. This particular space has since evolved to include a wide variety of businesses.   Crypto lending and borrowing have numerous advantages, and these advantages could attract new users. Moreover, it can help expand the ecosystem as a whole.   Attracting banks   One notable change in the crypto sector is that traditional banks may start taking an interest in the system. Rates on fiat loans are at historically low le...
একটি মন্তব্য পোস্ট করুন
আরও পড়ুন

Stablecoins vs Elastic Supply Coins – Which are Better for Loans?

  The crypto industry is immensely volatile. This is due to both its infancy, and its influx of retail investors. While volatility can be favorable to some (such as day-traders), most people find it uncomfortable and worrisome. As a means of curbing this, developers created coins and tokens that are tied to certain values, allowing for steadiness and peace of mind. There are two main categories of coins that achieve this: stablecoins and elastic supply coins.   Both are designed to be significantly more predictable, and for this reason, they make for fantastic forms of collateral when getting crypto-backed loans. On the surface, they can even seem very similar to each other, but the technology and economic principles behind them are wildly different. So which is the better collateral: stablecoins, or elastic supply coins?   Stablecoins use reserves   Stablecoins, such as Tether, TrueUSD , and Dai, keep their assets at consistent prices by using reserves of fiat mone...
একটি মন্তব্য পোস্ট করুন
আরও পড়ুন

WHAT IS A LOAN WRITE-OFF?

 In the financial industry, be it taxes, investments , or loans, a term that is periodically tossed around is “write-off.” We often hear this in the context of taxes (ex. “You will even get a tax write-off!”), but some are not familiar with what it actually means. What does it mean?  When an investment, like a loan, becomes delinquent (i.e. payments are late) or in default and is deemed uncollectible, the lender has a choice to make concerning the outstanding investment amount. They can either charge it as an expense or a loss. It is an accounting action that diminishes an asset’s value while simultaneously debiting a liabilities account. It is commonly used by businesses looking to account for unpaid receivables, unpaid loan obligations, or losses on stored inventory. Generally speaking, it can be seen as something to help decrease an annual tax bill.  The core idea is to use the money in conducting business, which was initially put aside at the time of lending the mon...
একটি মন্তব্য পোস্ট করুন
আরও পড়ুন