💰 What Are NFT Loans — And Should You Try One?
Ever wished you could get cash without selling your NFT? That’s what NFT loans are for.
Let’s break it down 👇
🔍 What’s an NFT Loan?
An NFT loan lets you use your NFT as collateral to borrow money — usually in stablecoins. Instead of selling your precious digital art, you just lock it up for a while and borrow against it.
It’s like taking a loan using your house — but in this case, it’s your NFT (like a Bored Ape, game item, or virtual land).
🛠️ How Does It Work?
1️⃣ You request a loan using your NFT as collateral
2️⃣ The NFT is appraised (based on floor price & market value)
3️⃣ A smart contract locks the NFT**
4️⃣ You get the loan (usually in stablecoins)
5️⃣ Repay the loan, get your NFT back. If you don’t repay, the lender keeps your NFT.
📊 Important Terms to Know
Loan-to-Value (LTV): How much of your NFT’s value you can borrow (usually 50–75%)
Liquidation Ratio: If the NFT’s value drops too much, the lender can claim it
Floor Price: The lowest price of an NFT in a collection (used to estimate value)
Interest Rate: What you’ll pay back on top of the loan amount
✅ Benefits of NFT Loans
Get liquidity without selling your NFT
No credit check required
Use DeFi to your advantage if you're holding high-value digital art or collectibles
⚠️ Risks to Watch Out For
NFT prices are volatile — if they crash, you could lose your NFT
Low liquidity — lenders may struggle to sell defaulted NFTs
Smart contract bugs — if the platform has vulnerabilities, your NFT could be at risk
Regulations — this is still a new space and legal rules can change
🧠 Final Thoughts
NFT loans are a cool way to unlock value from your NFTs without letting them go. But remember — with big rewards come real risks. If you’re not careful, you could lose your NFT for good. Always DYOR and only use trusted platforms.
#NFTLoans #CryptoEducation💡🚀 #BinanceSquare #wct #Write2Earn