NFTs can be used to create unique content. Most commonly, they are stored on Ethereum. They are not eligible for fungible money because NFTs are digital media that is unique and distinct. This doesn’t mean you can’t access nft liquid through your NFTs. This Bankless tactic will teach you how to use NFTfi as a way to borrow against digital collectibles.
Objective
- To obtain nft collateral for NFTfi
- Intermediate Skill
- Learn more about NFT lending
- ROI: Although it is variable, this number can be significant if borrowed funds are used properly.
What’s NFTfi?
You could argue that the NFT ecosystem is now more mature than it was in its teens. Many people have come to realize that NFTs are versatile and can be used for many purposes. The race is on for infrastructure improvements to NFTs. Why? You can use NFTs in new ways because they are programmed assets. These unique opportunities are attractive to crypto natives. While NFT infrastructure is still in development, there are promising early candidates for NFT index projects like NFTX, NFT20 and NFT fractionalization projects like NIFTEX. These platforms let you sell your NFT collateral to raise liquidity. But what if you wish to retain ownership of the collateral and loan against it? This will enable you to immediately access liquidity. NFTfi, a promising new project, makes it possible to lend NFTs. It was launched in the last year. Users can easily set up NFTs to repay loans in an anonymous manner. NFTfi is a peer-to-peer (P2P) marketplace that allows users to make NFT loans on the protocol. You provide an NFT (specifically an EC-721) as collateral. You can then accept or decline a loan offer from someone. Accepting the loan amount will result in Wrapped Ethereum, WETH, or DAI. Your NFT collateral will then be locked into NFTfi’s smart contract infrastructure. Your NFT can be retrieved by paying the loan and interest within the specified timeframe. The lender will pay the NFT instead if you default.
This market is subjective NFTs may be very subjective. According to the old saying, beauty is in the eye of the beholder. Your passion may be for one thing, but your friend might feel the opposite. Personal taste is everything. This dynamic is important because NFTfi operates as a P2P marketplace. NFTfi does not operate as a P2P marketplace. It is not guaranteed that you will get a loan in a specific amount or within a specified time. It all depends on the information that other NFTfi users are comfortable sharing while looking through the collateral. To secure NFTfi, you might also consider putting up an NFT. You could leave it there without interest for a long time. If you are able to list a highly-sought-after NFT within hours, you could receive multiple loan offers. It all boils down to which NFTs you use.