NFT loans

How do NFT loans work?

How can you give someone a loan of an NFT? Similar to traditional lending for tangible assets such as automobiles or houses, NFT lending is a type of asset financing that employs NFTs as security. In order to borrow crypto or fiat and pay it back with interest over time, NFT holders pledge their non-fungible digital assets as collateral and the NFT's value is monitored throughout the loan period to ensure a steady repayment schedule. Furthermore, lending an NFT is similar to investing because lenders stand to profit from the NFT's appreciation or future sales with the added benefit that they can earn income on their assets. NFT loans come in four forms: peer-to-peer (P2P), peer-to-protocol, non-fungible debt positions and NFT rents.

·      peer-to-peer (P2P) NFT loans

Peer-to-peer (P2P) sites use a simple offer method to match borrowers and lenders. The owner of an NFT puts it on the site and receives loan offers from interested parties. Once a match is made, the N…