NFT Lending Platforms – Three Platforms You Need to Know…Now
Non-fungible tokens (also known as NFTs) are possibly the most commonly understood and misunderstood digital asset, with several different definitions.
Whether digital art or a tokenized deed to a parcel of land (both physical and in the digital space), NFTs have been deemed many different things by many different people. They have also been lumped in with cryptocurrencies and dubbed “funny money” more than once.
The potential worth of NFTs, on the other hand, is being taken seriously by many including one Silicon Valley-based start-up. This start-up is developing a peer-to-peer marketplace and lending platform that will enable the financialization of unique one-of-a-kind assets.
Today we introduce you to three NFT lending platforms that are enabling NFT owners (ranging from novice to high-net-worth individuals) to unlock liquidity on one or more of their NFT collections on the Ethereum blockchain.
Here are Three Liquid Lending Platforms for NFTs that are raising the bar on NFT liquidity lending.
And they are…
Arcade
Arcade, a decentralized platform that facilitates loans against NFTs as collateral. A 3D & NFT Gaming Studio producing unique NFTs in collaboration with sketches & conceptual drawings of the ultimate Classic Arcade Series.
Arcade, a Defi marketplace and lending platform for loans backed by NFTs, has officially launched to the public. Enabling NFT owners, ranging from novice to high-net-worth individuals, to unlock liquidity on one or more of their NFTs on the Ethereum blockchain. It also facilitates the connection of lenders and borrowers to convert NFT holdings into liquid assets.
According to the company’s release, lenders holding stable coins, or ERC 20 tokens, can engage in a new source of yield by underwriting a fixed-rate term loan collateralized by the borrowers NFT collection. Arcade’s platform escrows high-value assets on the Ethereum blockchain via a clever (smart) contract mechanism.
“We have been working non-stop to ensure Arcade is the most intuitive and helpful platform of its kind and we are ecstatic to announce the site’s complete public launch.” Arcade is a multi-product NFT platform and Defi primitive, enabling consumers to convert non-performing NFT assets into good liquidity. Arcade’s continuous focus is on developing infrastructure and applications that enable the rise of non-financial transactions as an asset class. Their protocol holding over $15 million in “blue chip” NFTs and $6 million in loan volume held in escrow.
“As we expand our client base, which results in lesser loans but a wider variety of NFTs. The average loan size has been over $350,000, but we anticipate seeing smaller loans of roughly $5,000 to $10,000 against various collections, not just high-value and art pieces, but possibly certain gaming assets as well.”
Arcade is the leading Defi marketplace and infrastructure for loans secured by non-performing debt. They specialize in bringing lenders and borrowers together to convert idle holdings into liquid assets. Bridging the divide between the traditional art market and a new digital asset class. Arcade appraises, validates, and curates NFT collections on an independent basis for, institutions, DAOs, and high-net-worth collectors. Lenders gain access to a new yield source while borrowers understand their assets’ actual value.
Asset owners retain complete control and access to the collateral, and the platform is non-custodial (meaning, they do not hold the keys to your wallet, you do.) Arcade, being an open-source Defi primitive, also enables developers to build on top of the platform (like Ethereum) thereby facilitating the financialization of this new asset class on a larger scale.
Drops
Using permission-less lending pools, Drops enables the use of digital assets as collateral for loans. Including NFT collectibles, metaverse products, Financial NFTs, and Defi assets.
Drops is a leading NFT lending platform that enables owners of metaverse items to use their digital assets as collateral for loans. Their ecosystem also allows owners of metaverse items to earn an additional yield in Defi. The fundamental value proposition alleviates the selling pressure on idle NFT assets. Thus, by providing routes for quick liquidity or passive income generation.
They have announced today the debut of its NFT lending platform, with the test net serving as the foundation for the main net’s launch. The Drops NFT lending ecosystem aims to close the liquidity gap in NFT marketplaces by allowing users to use their metaverse products as collateral for loans.
They’re confident about capitalizing on the growing popularity of NFTs to provide much-needed liquidity solutions. Their lending platform creates a collateralized market for idle NFTs, allowing users to acquire loans and earn an additional yield. NFTs have occupied a central position in crypto-related discourse these past several months. In contrast, the most recent crypto market crisis demonstrated underlying liquidity difficulties in this
emerging sector.
The Drops NFT lending concept is intended to bring liquidity to NFT markets by linking the metaverse environment with Decentralized Finance (DeFi), as described by their Dev Team.
“We believe that NFT owners will be able to extract more excellent value from their idle assets. The platform will be implemented in three stages, beginning with the test network, an audit, and ultimately the main network launch.”
Anyone interested in participating in the Drops NFT Loans test net should fill out an application, following which they will be given instructions on how to participate in the test net.
NFT collaterals delivered to the permissionless pools on the platform will be represented by the native tokens dNFT and tokens developed by Drops.
Those who have NFTs and contribute their digital assets to a specific pool can utilize the native tokens to borrow money from the markets or pay off outstanding debts.
The collateral factor will be a number between 0 and 1 that will indicate the portion of the underlying asset value that can be borrowed in each market, depending on the market type.
The Drops Team has said, “We are optimistic about the future of the metaverse because of its potential to foster the development of global digital communities. The Drops NFT lending platform is an excellent starting place for anyone interested in contributing to the development of the metaverse.”
Finally, Funko
Among the collectible products that the company creates and distributes are action figures and cuddly stuffed animals. The company supports people’s “fandom” where fans meet their collectables.
Funko is now expanding into non-fungible tokens by acquiring a controlling interest in TokenWave, the company behind “TokenHead,” a smartphone application and website for showing and tracking non-fungible token holdings.
Funko intends to create NFTs of its most popular licensed characters and companies for display on TokenHead. They’ve also gained license agreements with several well-known brands, including Marvel heroes, Star Wars, Harry Potter, and the Football League, among others. The action benefited the company’s stock. Year to date, the price of FNKO stock has doubled, climbing to $20.55 per share from $10.38.
Funko has provided fandoms with an affordable and accessible way to experience their favorite characters and icons. However, the continuing expansion of accessibility may result in a lack of enthusiasm for their offerings. That is why the brand created special edition Funko Pop figures.
Limited edition items generate additional buzz. As a result, when new collections are released, there are queues around the block of individuals hoping to get their hands on these limited-edition items. With its limited-edition Pops, Funko achieved this Impact. Ramona Sukhrj said in an essay for Impact, “Like market forces, the scarcity principle states that the more scarce or unattainable an item is, the more valued it is.”
As a result, special edition Funkos are producing the same phenomena as special edition Supreme goods, which sell for up to ten times their original price. Originally priced between $11 and $15 a piece, some vendors ask as much as $700 for the figurines. Given how inexpensive Funko Pops are in general, these resale prices are likely to cause customers to acquire new figures when they first emerge. It increases Funko’s appeal and price.
The cuteness, affordability, exclusivity, and diversity of Funko Pops have all led to their ascent in mainstream culture. Most people believe that Funko’s popularity came out of nowhere, while the company has been working actively with fandom culture since its inception. On a mission to make goods for followers of any pop culture character. As a result, fan culture has become accessible to anybody who wants to begin a collection or enjoy pop culture in both a physical and now a digital asset. We will see how they do in the NFT space.
In conclusion:
As the NFT marketplace expands, so does the number of participants. However, for individuals unfamiliar with the operation of NFTs or investing in them. Subscribing to our newsletter is one way to stay on top of them. Additionally, we recommend following software and gaming developers on Twitter to stay informed and participate in debates.
Defi prospects will be expanded in the future to facilitate the widespread adoption of NFTs and digital ecosystems. Which we expect will be more prevalent.
Finally, it all comes down to first-hand knowledge. Like trading cards of the 90’s, fans bought into these cards believing that one day they would come of value. Ninety percent of them did not. So, DYOR and understand that the purchase of anything in the Metaverse, either in the form of a NFT collectable or work of art, (as an investment) is still highly speculative.
What are your thoughts on the future of NFTs?
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