Nexo primarily offers liquid funds to its users for their crypto pegged collaterals such as Bitcoin, Ethereum, and other major cryptocurrencies. It has now extended its lending services to the NFT community members.
The new feature will see users offer up their collectible NFTs as collateral, after which the platform will offer a loan in fiat currency based on the collateral.
According to its web page, Nexo is currently the world’s largest crypto-based lending platform based on credit volume. Its a Blockchain leveraged credit platform focused on providing credit to the crypto industry, individuals, and organizations.
Users registered can get up to a certain permissible percentage of the crypto they hold as credit.
The platform uses a layer two protocol to facilitate the delivery of its services and to protect its interest in the cybercrime space.
Earlier this month, the company’s announcement revealed the extension of the credit services it offers to the public.
A new feature has been added to its front-end access suite, one that will see users be able to leverage their NFT collectibles for liquid funds.
Nexo’s NFT collateral Scope
NFTs, or non-fungible tokens, are mostly units of digital representation of art represented as a block of machine-readable data on individual Blockchain networks.
The NFT industry saw an overnight success that burgeoned over $1 billion worth. Activities in the industry took the cryptocurrency community by storm earlier this year, with numerous retail investors becoming accomplished ‘big men overnight. The fear of missing out (FOMO) and the marketspace’s marginal price stability are some of the major contributors to the industry’s fast-paced success.
Famous collections and collectibles like Bored Ape Yacht Club (BAYC), Cryptopunks, and Meebits have seen their units sell for great prices of up to a dozen million dollars per NFT with a minimum sales price of a hundred thousand dollars.
Currently, the platform accepts NFT collectibles from Bored Ape Yacht Club and Cryptopunks. According to them, their catalog of acceptable NFTs will increase and expand progressively from there.
Fiat currency withdrawal is not the only firm of withdrawal available to investors utilizing the platform. Options that include a variety of stablecoins, ETNs, ETFs, Ethereum, Bitcoin, and other digital assets are available for withdrawal use.
Nexo will disburse loans worth as much as 20% of users’ portfolios to qualified users, Nexo said. The announcement means that a user can borrow up to 20% of the NFT they own without liquidating to access these funds.
The service merits over traditional loaning services include the lack of credit score hustles and lack of unnecessary inquiries, as all required is the user’s approved collateral.
The firm claimed that the service would not liquidate the offered collateral before the loan’s maturity. Even if the value of the NFT changes in the course of the loan either positively or negatively, Nexo assures the public that it won’t liquidate the NFT until loan maturity.