Binance has joined the bandwagon of offering NFT loans. This Binance NFT Loan facility allows users to borrow Ethereum by keeping their blue-chip NFTs as collateral.
The Binance NFT Loans “will allow people to use blue-chip NFTs to borrow crypto, starting with ETH, introducing the benefits of DeFi to the Binance NFT community,” Binance said in a press release. The service will go live at 11:00 (UTC) on May 26, 2023.
Binance also mentioned that they would offer this service through a peer-to-peer approach and would have pools for loans. Currently, it is only four collections that are supported and can be used as collateral, and it includes the following.
- Bored Ape Yacht Club (BAYC)
- Mutant Ape Yacht Club (MAYC)
Binance says that they would be expanding to more collections on Ethereum and also will expand to other blockchains in the future.
Initially, the platform is keeping the annual interest rate at 3.36% and will later increase it to 11.20%. The loan-to-value ratio is 40% for Doodles, 50% for Azuki and MAYC, and 60% for BAYC collections.
Recently, Blur launched a feature called Blend, which is a peer-to-peer perpetual NFT lending platform where lenders have flexible rates while lending NFTs. Binance, on the other side, is offering instant liquidity, zero gas fees, liquidity protection, and competitive interest rates.
Binance NFT is offering a discount during the launch of the loan feature. The users who will be securing an NFT loan will be getting a 70% discount on the current borrowing interest rates. There is no specified time mentioned for when this offer would end.
You can access the Binance NFT loan page here.