Binance NFT staking and NFT lending: The benefits of using NFT as collateral

The non-fungible token (NFT) market is growing rapidly, continuing to stimulate the imagination of artists, collectors and investors around the world. As interest surges, innovative financial products are emerging to adapt to and leverage the unique characteristics of NFT. Welcome to understand the new concept of the integration of NFT and decentralized finance (DeFi): NFT-Fi.

Although NFT-Fi is still in its infancy, it has the potential to revolutionize the financial industry. Binance is at the forefront of this innovation, providing NFT-Fi products such as NFT staking and NFT lending.

Read this article to gain an in-depth understanding of the NFT-Fi field.

What is NFT-Fi?

NFT-Fi bridges non-fungible tokens and decentralized finance, while reshaping the future of NFT trading and financing, while also providing basic advantages.

Unlike traditional NFT transactions that focus only on buying, selling and collecting digital assets, NFT-Fi integrates innovative products such as pledge and lending in an effort to maximize the potential of NFT.

NFT-Fi also provides pioneering financial solutions to mine the hidden liquidity of NFTs. NFT-Fi can unlock the potential of these valuable digital assets through fragmentation, tokenization, lending, and using NFTs as collateral. Moreover, NFT users do not necessarily need to sell their assets to enjoy these benefits.

Benefits of NFT-Fi

Broaden the scope of financial products

NFT-Fi launches a range of financial products that NFT holders have previously been unable to access. After users integrate NFT with traditional DeFi products, they can obtain a variety of investment, pledge and lending options. With the expansion of financial instruments, users can enrich their portfolios and maximize their digital assets.

Improve investment value

The NFT market is booming, and NFT-Fi can thus provide many innovative ways to increase the value of non-fungible tokens as investments. Integrating financial services into the NFT ecosystem can unlock liquidity so that users can tap into asset potential without selling assets. It can also realize ownership division and profit sharing models, thereby attracting more investment opportunities.

Financing opportunities are guaranteed by assets

With NFT-Fi, users can now use their NFT assets as collateral to apply for loans or obtain financing. Binance NFT lending products provide users with the possibility of releasing NFT-bound capital, thus providing new ways to create liquidity and drive further growth in the larger digital asset market. For more information, please refer to our guide document "NFT Lending: How to Loan Cryptocurrency with Your NFT".

Spread risks and potential returns

NFT-Fi allows users to participate in various investment opportunities related to the unique attributes of NFT to further enrich their portfolio. Investing in different asset classes can help reduce risks, allocate potential returns and optimize portfolio performance.

Get to know Binance NFT-Fi products

NFT staking

Users can lock NFTs with platforms or smart contracts to get rewards. NFT owners can cash out assets through pledges without having to sell assets. Currently, Binance provides Ape stake and Sandbox stake.

Advantages of Binance NFT staking:

One-click pledge

The pledge reward is distributed to your account every day

Current pledge options

Free fuel charges

Just like pledging cryptocurrencies, NFT pledges also have to bear specific risks, and the rewards may be affected by factors such as the rarity, popularity or utility of pledged NFTs. Despite this, as a potential money-making opportunity, the popularity of NFT pledge continues to grow in the rapidly developing NFT and DeFi fields.

NFT lending

Similar to pledged borrowing coins, Binance NFT lending allows owners to borrow funds using NFT as collateral. To obtain an NFT loan, the borrower pledges his NFT on the platform or in a smart contract, which then the platform or smart contract provides a specific amount (usually in the form of a cryptocurrency) based on the value of the borrower's NFT collateral. After the loan is repaid, the borrower will regain ownership of his NFT.

The benefits of NFT lending include:

Free fuel charges

Instant lending

Forced protection

Low interest rates

Starting July 5, Binance will offer a 20% discount on lending rates.

NFT lending provides NFT holders with more flexible financial options, so their popularity is getting higher and higher. But borrowers should be wary of potential risks, such as NFT price fluctuations, which may affect the value of collateral during the lending period.