Binance’s NFT Marketplace launched an NFT Loan feature
Accessing to loan has become something almost average people use to keep their business survive under this economy situation. There is no doubt that every part of the world is hit by inflation as a result of that standard of living become high that everyone looking for an option to strengthen their financial system.
Loan is part of program that has helped so many to gain access to financial freedom and I would say this has been a way average people use to get materials things they needed. But presently people in United States are facing two difficult things, "Living under high standards, and high interest rate on loans".
This two things have really affect the economy growth of the country, individual are getting it hard to get a loan with low interest meanwhile all these are been caused by Fed longtime aspirations of rate hike. Infact this result in the collapse of banks in America because loan is part of program banks system use to generate revenue and since the interest rate increases individual are not willing to obtain a loan with high interest.
Companies and individual are now looking for financial institutions that can offer low interest on loan, and if you remember a weeks ago Apple release a wallet for its users to able to access low interest rate on loan because the demands for loan have been risen.
However, Binance again launched an NFT marketplace to crypto users to be able to borrow ETH using their NFTs as collateral without selling them off is another good thing happening to support people financially.
The Binance NFT loan feature is way of introducing the benefits of DeFi to the Binance NFT community according to Mayat, and the aims is to cater for users who want a quick access to funds but don't want to sell their NFTs. The program is for high-profile NFT projects, and binance will offer competitive interest rates and zero gas fees.
It quite interesting to heard about "Peer to Pool mechanism" again. The system use peer to pool mechanism as a loan pool which will determine the amount of ETH users can borrow base on the floor price of their NFTs. Even at the moment of writing Binance's NFT loan feature already supports four well known collection, such as Mutant Ape Yacht Club (MAYC), Bored Ape Yacht Club (BAYC), Azuki, and Doodles, but in future the program will support more NFTs.
One thing is that, regardless of how advantages this feature users must understand NFT is part of crypto and definitely it will associated with the risk of price volatility and liquidity risk, infact loam term change will also be a problem people will face but yet I still consider it as good feature in crypto industry.