A recent Web3-focused report claimed that the “utility” element of non-fungible tokens (NFTs) is the biggest reason for people to continue investing in them, despite the volatility of the crypto market. When we talk about the usefulness of NFTs, there are many ways to do it, such as trading it for favors or funds within the game, or renting it out to others who may need the NFTs you have. Lending NFTs in the Web3 world helps both the owner and their renter – where one receives the rent and the other uses the NFTs in the compatible metaverse or any Web3 game.
NFT lending trend has gained momentum within the Web3 community, crypto exchange Binance testifies blog Posted in February 2023. NFT lending allows NFT holders to obtain liquidity without having to sell their assets.
While some may agree to pay their rent nft On a daily, weekly, monthly basis – for say, gamers who need these NFTs to get ahead but don’t want to buy them – others are using NFT loans as a way to secure instant loans. Can
“Since NFTs also contain accessories… such as an NFT car game may contain not only car NFTs but also accessories, a person who borrows an NFT may have purchased some of these accessories, and retain them To keep, they might as well eventually buy their own NFT, and as you know, they might buy more and rent it out, which propagates the cycle,” Kameswaran Elangovan, said the COO and co-founder. GuardianLink told Gadgets 360. Based in India, GuardianLink is an NFT ecosystem that facilitates digital collectibles transactions.
This practice in the crypto industry gives NFT holders access to capital while retaining ownership of the digital collectible.
“Lending, as with all businesses, creates a secondary market and helps expand the number of users exposed to a certain product or service, and NFTs are no exception. NFT lending is sure to get more people into it web3 ecosystem,” said Elangovan.
Meanwhile, borrowers of NFTs also put off spending on buying NFTs that they only need for a short period of time. This protects them from falling prey to financial risks.
“Also, lending promotes secondary adoption. After some time, it is quite likely that the owner of the NFT will want to get it back because they invested in it and the person who is used to having the NFT under their control for a short period of time will want to rent it again. It creates a sustainable market not only for those who give it, but also for those who take it on credit basis,” said Elangovan.
Cumulative quantum of borrowing against NFT Allegedly reached $1 billion (approximately Rs. 8,195 crores).
NFTFI and BendDAO are among the well-known NFT lending and liquidity providers.
According to Elangovan, NFTs can help lending skeptics but curious Indians operate safely in this space.
“In a market like India where people do not readily commit to purchase, lending definitely helps them to become familiar with the benefits and utilities of NFTs before buying them,” he added.
nft sale Allegedly There was a huge increase of 117 percent in February 2023. Around March, the valuation of the global NFT market surged to a nine-month high of over $2 billion (roughly Rs. 17,200 crores) since June last year.