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As NFTs become more popular, they are becoming more commonly used as collateral for loans. The entire platform has now been set up to allow people to leverage their digital assets to borrow cryptocurrencies or fiat currencies.
One of the latest stories from the NFT-backed loan sector is Ethereum worth $1.3 million It was borrowed by a user identified simply as “Fragment”. This loan was obtained collateralized by her two NFTs from the Mutant Ape Yacht Club.
The expensive loan was facilitated by NFT lending firm Arcade, which confirmed to the press that it was a non-recourse loan. This means that if the loan defaults, the platform reserves the right to seize the assets.
The terms of the loan are 1,044 Ethereum 18% APY to be paid back within 90 days. According to CEO Gabe Frank, arcadethe crypto market is stable and this allows people within it to access the loans they need while leveraging their assets.
“It’s great to see these loans funded in this market environment, and even better that it’s all happening on-chain via DeFi. With prices somewhat stable and volatility low, lenders appear willing to take on larger loans.At the same time, mega mutants are incredibly rare assets
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*All investment/financial opinions expressed by NFT PLAZA are based on the personal research and experience of the site moderators and are intended for educational material only. , the product should be thoroughly investigated.
Tokoni Uti has written extensively on blockchain and cryptocurrencies over the years. Her work has been featured on sites such as BTCmanager and Blockchain Reporter. She has a degree in Corporate Communications.
