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Binance Launches NFT-Backed Lending Function

The largest cryptocurrency exchange, Binance, has launched a lending function into its NFT marketplace. Bored Ape Yacht Club (BAYC), Mutant Ape Yacht Club (MAYC), Azuki, and Doodles are the top-performing NFTs, and the company has announced that it will start lending ETH against these assets. With NFT Loans, NFT holders will have access to a new source of liquidity that will expand their ability to trade without selling their valuable NFTs.

NFTs have been resilient and the market is rebounding

The addition of the lending function comes not long after the release of Blend, a lending protocol developed by Blur, another major NFT platform. However, there is one major notable difference between the two lending platforms-while Blend is a peer-to-peer platform that connects borrowers and lenders directly, Bianance’s NFT feature connects borrowers and lenders through the platform’s NFT marketplaces. According to Binance, its approach adds an extra layer of security to the lending process.

On Binance’s NFT lending platform, you won’t have to worry about paying any Ethereum transaction fees or gas costs. According to Binance NFT’s website, the current interest rate for NFT loans is 7.91% p.a., and the loan-to-value ratio ranges from 40% to 60%. To complement Ethereum, Polygon, and its own BNB Chain, the exchange’s NFT marketplace, Binance NFT, announced in early May that it will begin supporting Ordinals, or Bitcoin NFTs.

The global NFT market is finding stability after months of speculation regarding the future of these assets. After taking the digital assets market by storm in 2021 with eight-figure fees being paid for some pieces, the hype cooled off significantly. The harsh winter was perhaps best exemplified by the plummeting of the first Tweet Nft from an initial high of $2.9 million to a resale price of a paltry $132. However, the market seems to have rebounded, with greater stability, albeit with subtler pricing.