Someone took a $ 1.4 million loan with an NFT as collateral

A loan was issued for $ 1.4 million using the NFTfi crypto platform. The terms of the agreement are 30 days at 9.69% APR.

And the guarantee? Well, it’s an NFT.

As The Block recently reported, NFTs are starting to be used as collateral when taking out loans. It works like any other type of secured loan. If you don’t repay the loan, the other party takes your collateral, in this case the NFT.

It’s a setup that has worked well for a lender. They loaned 3.5 ETH (valued at $ 7,350 at the time) and when they were not repaid they received the collateral, an NFT “Elevated Deconstructions”, valued at. $ 340,000.

These NFT-backed loans have increased in frequency in recent months as more and more users have become more comfortable with the concept. There have been five new loans so far today, according to the project’s Discord channel tracking robot, along with a bunch of new loan offers and several loans in repayment.

The $ 1.4 million loan was the largest loan guaranteed by NFT to date, according to NFTfi. It started on October 28 and the NFT was Autoglyph # 488. It is a type 10 autoglyph, which is the rarest type.

Autoglyphs are a collection of generative art where the art creation algorithm is stored on the Ethereum blockchain, meaning that the token and the art are much more closely related than is the case with the Most NFTs. The current floor price for an autoglyph is 299 ETH ($ 1.3 million).

The loan was provided by MetaStreet DAO. Its stated aim is to provide financing to those who wish to access capital and are ready to put up NFTs as collateral. The loan was paid to a pseudonymous crypto user called KrypToniK in the DAI stablecoin.

© 2021 The Block Crypto, Inc. All rights reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial or other advice.

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