Binance is preparing to roll out a new product that would enable non-fungible token (NFT) holders to borrow crypto against NFT assets.
Binance NFT loan supports only ethereum borrowing
Crypto exchange giant Binance will launch the Binance NFT loan service on May 26, according to an announcement.
The new product, which comes nearly two years after the unveiling of the Binance NFT marketplace, will support ethereum loans for now, along with high-valued NFT collections like Bored Ape Yacht Club (BAYC), Azuki, Mutant Ape Yacht Club (MAYC), and Doodles.
Part of the benefits offered by Binance includes zero Ethereum gas fees, which would encourage users to utilize the new product.
Also, Binance is offering users a 70% discount on borrowing interest rates per annum (p.a.), with the standard interest rate slashed from 11.2% to 3.36%. This promotional rate runs from the launch date until further notice.
According to the Binance NFT website, loan-to-value ratio for the supported NFT collections ranges between 40% and 60%, with BAYC being the highest, and Doodles being the lowest.
The announcement added that the Binance NFT loan product will support more assets for borrowing and NFT collateral options in the future.
Binance’s entrance into the NFT lending space comes shortly after NFT marketplace Blur, launched Blend. Unlike the Binance NFT loan service, the Blend protocol allows the lender to determine the interest rates and loan-to-value ratios.