The market for Non-Fungible Tokens (NFTs) has experienced significant growth over the past few years. There are different applications for your NFT collection and one of them is to use it as collateral to borrow funds.
Nexo’s most recent developments have produced substantial user popularity. The platform, a prominent crypto exchange and lending platform in the industry, has implemented a function that allows customers to utilize digital artwork as collateral. At the time of writing, Crypto Punks and Bored Ape Yacht Club NFTs can be used as collateral. Due to how popular these two collections are, we assume they chose to start with them in order to reduce risk and give their customers the best service possible.
Why Should You Use NFTs As Collateral?
There are a variety of reasons why you should consider getting an NFT-backed credit with Nexo. Here are six reasons why you should put your NFTs as collateral with Nexo.
Instant Liquidity
The first upside is that you may obtain funds without having to sell your NFT. Using this method, you may obtain immediate liquidity for your NFT collection. Anyone who has ever sold an NFT item understands that the process can be extremely time-consuming, especially for newcomers to the NFT industry. If you believe in their upside potential and you want to keep them, gaining instant liquidity on Nexo is incredibly easy.
No Liquidations Before Maturity
Although the value of your valuable NFT may change throughout the course of the loan, you will not be forced to liquidate it. This is a really intriguing feature since it ensures that no liquidations can occur before maturity.
Personal Customer Service
You will be assigned a dedicated account manager who will assist you in making the most of the Nexo platform. Because this functionality is rarely seen on other platforms, it provides a strong assurance that the platform is secure. Furthermore, with the assistance of your newly assigned account manager, you will be able to fully utilize the platform to your benefit.
Web 3.0 Art Financing
You can use this option to contact Nexo’s expert team in order to obtain extra financing for the acquisition of top-tier NFTs. This is just another fantastic feature that allows users to get the most out of the platform to its fullest extent.
No Credit Checks
Users can be accepted without the requirement to undertake a hard credit inquiry to review their credit history, which would otherwise be required. This means that the specifics of your credit history will not be taken into consideration when determining whether or not you will be approved for the loan.
Borrow In ETH Or Stablecoins
Depending on your situation, you may be able to obtain an NFT-backed credit in ETH or stablecoins. This provides users with greater flexibility.
Nexo Loan Rates
Nexo is well-known in the cryptocurrency scene for offering great rates when compared to its competitors. Typically, interest rates for Non-Fungible Token (NFT) borrowing range between 12% and 15%. This is entirely dependent on the current market circumstances as well as your individual NFT.
Depending on the price of your NFT, a loan-to-value (LTV) ratio is used to calculate the amount of credit you may borrow. An amount ranging from 10% to 20% of the NFT’s current market value can be credited to you.
After you have paid off the credit, the platform will instantly transfer your specific NFT back to your account. A payment asset will be transferred to Nexo if you do not pay back the complete repayment sum by the deadline. The property will be passed to Nexo as a form of payment.
How To Borrow Against NFTs On Nexo
On Nexo, the first step is to create an account. Nexo’s basic and easy-to-use UI should make this easy. First, check if Nexo is available in your country. To create an account, go to the Nexo official website and click “Create Account.” Then enter your details and verify your email address. Your Nexo account is now ready. Also, before proceeding, confirm your identity.
Borrowing against NFTs as collateral is simple with Nexo. Simply navigate to Nexo’s official website. After that, head over to the NFT lending tab. Once there, scroll down until you find the “Apply Now” section. Enter all of your information, including your full name, phone number, and the ID of the NFT you wish to borrow against. Click “Apply Now” and you should receive a response from Nexo in due time.
Frequently Asked Question (FAQ)
Can I Get A Loan On My NFT?
Yes, it is possible, though it is dependent on the type of NFT you own. When it comes to collateral, Nexo will accept NFTs from the CryptoPunk and Bored Ape Yacht Club collections.
What Are Nexo’s Borrowing Rates?
Nexo offers a fantastic NFT interest rate that ranges between 12 and 15% per year. This, however, is dependent on both the market and the quality of your NFT. Your NFTs will be returned to your account as soon as you’ve paid off the debt.
Is Nexo Legitimate?
Its custodial wallet uses cold storage, which is kept in military-grade Class III vaults for the highest level of security. The company is audited in real-time by Armanino LLP.
Takeaways
- The market for Non-Fungible Tokens (NFTs) has experienced significant growth over the past few years.
- Nexo, a well-known cryptocurrency exchange and lending platform, now allows customers to use digital artwork as collateral.
- Crypto Punks and Bored Ape Yacht Club NFT collections can be used as collateral on Nexo.
- Nexo is well-known in the cryptocurrency industry for offering competitive rates; a typical NFT borrowing rate is between 12 and 15%.
- After you have repaid the credit, the platform will immediately return your NFT to your account.
- Nexo offers a custodial wallet that uses cold storage in military-grade Class III vaults to ensure maximum security for its users.