Crypto is no longer a new concept, and so are NFTs. If anything, there are over 20k projects according to trackers for a cumulative market cap exceeding $1 trillion. At the peak of the crypto market, this stood at over $2.1 trillion. And it is only getting started.
What’s, however, keeping crypto enthusiasts thrilled is the amount of innovation in the sphere. First came DeFi, then NFTs, then Play-to-earn, and now, the fun in the current value-sucking market is NFT-Fi. This interesting field combines the fun of NFTs with the decentralization of finance made possible by DeFi protocols.
Merging them and offering reliable yet trustless platforms for thousands, if not millions of NFT holders, the ability to earn passive income without the need to sell their valuable assets is why investors and analysts expect this emerging market to explode in years to come. By the close of 2021, the NFT market registered trading volumes above $40 billion. In another few years, the sphere would easily command hundreds of billions.
For this reason, the race has begun, and NFT U Loan is pulling ahead of the rest. For starters, NFTuloan is an NFT-Fi platform launched on Ethereum that offers users the ability to take loans using NFTs as their collateral. It is decentralized, and liquidity providers earn passive income by providing liquidity needed to supply NFT borrowers with funds. Borrowers assess liquidity from any of the over 200 NFT collections supported by NFTuloan. The NFT-Fi platform is already live on testnet, has an active community, and what’s best is that it is ready to scale with the largest NFT collections in the market.
NFTuloan versus Competitors
Since the NFT-Fi scene is growing and other projects offer similar services, how does NFTuloan stack up against competitors?
BendDAO and JPEG’d
Like NFTuLoan, BendDAO and JPEG’d are P2Pool platforms where NFT holders can access crypto loans trustlessly but with some differences. For example, BendDAO and NFTuLoan exist as a DAO while JPEG’d does not. At the same time, while BendDAO and NFTuloan offer the same maximum loan duration period of 60 days, JPEG’d is at a maximum of 30 days. However, the primary difference is the number of NFT collections supported. While BendDAO and JPEG’d only allow assets from six collections as collateral, NFTuLoan supports over 200 unique collections and plans to add more. Like in BendDAO and JPEG’d, borrowers receive loans in ETH in NFTuloan. The only difference is the amount of loans that can be applied for. In NFTuloan, borrowers receive far more loan amounts considering the loan-to-value ratio in BendDAO and JPEG’d stand at 30 percent and 32 percent, respectively, lower than NFTuloan’s 70 percent. On top of all these advantages, NFTuLoan offers a generous insurance program to protect liquidity providers and borrowers’ assets, a policy absent in BendDAO and JPEG’d.
NFTfi and Arcade
NFTfi and Arcade are peer-to-peer protocols where holders of supported NFTs can use them as collateral to access loans. While these protocols may have the first mover advantage, they have notably failed to expand to meet the ever-rising user demands. For example, NFTfi supports 20 NFT collections while Arcade limits their supported NFT collections to six. At the same time, their LTV ratios are comparatively low, with NFTfi’s at 40 percent and Arcade’s at four. NFTuloan is far ahead with an LTV ratio of 70 percent, one of the highest in the industry. As mentioned above, it has a generous insurance fund and a superior liquidation mechanism linked with liquid NFT marketplaces. Moreover, ULOAN token holders can participate in voting through the NFTuloan DAO.
Competition will be cut-throat as the NFT-Fi scene grows, but customer-facing platforms will emerge on top. NFTuloan supports one of the industry’s highest NFT collections support and offers instant NFT valuation and liquidity. For passive income, ULOAN holders are free to stake and earn up to a 30 percent APR. The protocol also provides the highest yield for ETH liquidity providers.