Lending platform NFTfi has approved a Cryptokitties founder cat as collateral for 25 thousand dollars, allowing someone to borrow money using their digital collectible. It’s the highest loan ever on the platform. The person who locked his Cryptokitty away and accepted the money, will need to repay 26.250 dollars within a time limit or lose their collateral.
Borrowers can offer their digital assets as collateral on NFTfi, and lenders can choose which NFT they’re willing to accept before initializing the loan. Ultimately the lender will make a profit, in this case 1250 dollars, or get the digital asset that was set as collateral. This could be virtual land in Decentraland, a collectible Cryptokitties cat or a certain piece of crypto art.
At this moment people have used NFTfi for a total of 683.19 ETH in loan volume. That would be 407 thousand dollars. At the moment they’ve been using Cryptokitties the most, followed by Cryptovoxels, Axie Infinity, Decentraland, Somnium Space and Cryptopunks.
More use for NFTs
The NFT ecosystem is developing very fast. A non-fungible token isn’t just a digital asset you can own and put in your wallet. Because it’s on the blockchain, you can do all kinds of interesting things. You can stake your NFT and participate in mining programs, like the one for The Sandbox. You could lend your digital asset to other players, and earn REVV tokens in F1 Delta Time, or you could set it up as collateral and borrow more money. Possibilities are endless with economy features like mining, borrowing, lending, owning, selling, building and developing.
Non-fungible tokens are different from regular cryptocurrencies, as these ‘NFTs’ are unique tokens. For example, these tokens can be contracts, artworks, a collectible trading card or perhaps a digital racing car. If you want to understand more about non-fungible tokens, please read this article. If you want to dive a bit deeper into the rabbit hole, learn about interoperability and the play-to-earn business model.