Binance has recently implemented the function of borrowing cryptocurrencies using NFTs as collateral.
At present, users of Binance can use digital assets from Bored Ape Yacht Club, Mutant Ape Yacht Club, Azuki and Doodles collections as collateral.
The loanable currency is currently limited to Ethereum only, but Binance intends to expand available collections and currencies in the future.
With the current interest rate standing at 3.39% annually and loanable amount range of 40-60% of token value, Binance also offers zero gas fee on Ethereum. Product manager of Binance, Mayur Kamat, remarked to The Block that the new loan feature “allows them to participate in the market without having to sell their precious tokens.”
Taking one step further, the crypto exchange incorporated Bitcoin Ordinals to their marketplace in late May. This opens up “unique and innovative opportunities for creating non-fungible tokens,” as per the company’s statement.