NFT as a collateral on crypto loans

NFTs are a hot topic in the last months and as time goes by they are developing very interesting use cases also in the financial and money lending field.

Within the world of DeFi there are many Lending & Borrowing platforms with which to receive stablecoin loans for use in other protocols. Aave, Maker DAO, Compound and Liquidity are just a few of the protocols available in the Ethereum world that are attracting millions of users.

With the growth of NFTs as a worldwide phenomenon, another type of platform for collateralized liquidity lending is also gaining ground. In fact, the market for loans secured by non-fungible tokens is emerging, where users can put their NFTs as collateral for a loan or can, in turn, offer a loan to other users with their tokens as collateral.

The best-known platform in this sense is NFTfi, a project launched in May 2020 and which in recent months boasts strong growth in terms of liquidity anchored within it. NFTfi is a protocol that allows users to deposit and/or withdraw their NFTs as collateral to borrow an amount of ETH offered by other users.

The borrowing user can choose the terms such as interest rate and desired amount. Any ERC-721 can be put up as collateral and once a…