“NFT Lending: Examining the Risks and Rewards in the Growing Ecosystem”

introduction

Welcome to this week in the Metaverse, where we round up the hottest news from the world of NFTs, culture, and the Metaverse. As NFT mania peaked in 2021 and 2022, borrowing money against an NFT seemed like a logical move. However, with some of the largest NFT collections falling in value and a troubled crypto market, we have to ask ourselves: is it still a smart idea to borrow against NFTs?

The popularity of NFT credit products

Despite the above concerns, Blur, now the largest NFT marketplace by transaction volume, has launched its lending product, Blend, which offers 24-hour person-to-person lending with no fees for using the platform. According to Dune, since its launch earlier this month, it has already issued 33,580 ether worth of loans, or about $61 million.

Competition in the NFT lending ecosystem

While Blur’s Blend has been warmly received by traders and speculators, Gabe Frank, CEO of rival NFT lending platform Arcade, is skeptical of Blur’s lending model. In contrast, Arcade’s lending business is doing better than expected, with around 7,000 linked active wallets, a user estimate, compared to Blend’s 988 individual borrowers, according to Dune. Frank believes Blend’s popularity bodes well for the NFT lending ecosystem as a whole, but also notes that Blend’s future floor prices for the NFT collections he accepts such as BAYC, Mutant Ape Yacht Club, Azuki, Wrapped Cryptopunks, DeGods, and Miladys could become increasingly volatile.

The future of NFT lending

Competition between lenders on Arcade is slowly lowering interest rates for borrowers, to the point where even Frank has secured a six-month 45-ether loan ($81,600) at an APR of 9% — lower than APR 9.5% APR on his Toyota loan Tacoma. While the future of NFT lending remains uncertain, it offers an interesting insight into the possibilities Web3 is opening up for the financial world.

Assassin’s Creed NFTs

Ubisoft has licensed a number of Assassin’s Creed NFTs that will also exist as physical characters in a cube. The non-fungible tokens represent characters from the games and are called “digital souls” whose weapons, outfits and looks can be edited with a companion app.

Axie Infinity: Origins

Sky Mavis has released a lite version of the Web3 mobile game called Axie Infinity: Origins. Players can enjoy the game with “beginner” Axies, but those who already have Axies from the desktop version can also play with their Axies.

Blockchain powered photos

The Kim Goodwin Archive is selling 40 photos with a near-field communication tag that allows the blockchain-backed certificate of authenticity of each photo to be displayed. Photos start at $300 each.

Pudgy penguin toy

The toys developed by PMI, which also makes products for the Fortnite and Among Us video games, are Pudgy Penguin’s attempt to reach more mainstream consumers.

Improved scalability for blockchain technology

Horizon Blockchain Games has integrated its Sequence wallet and infrastructure stack with Polygon Supernets, which helps app developers customize and expand the block space according to their needs. Sequence aims to improve the scalability, security and user experience of blockchain technology.

Overall, with the rise of Web3 and the Metaverse, NFTs are becoming more ubiquitous, offering new opportunities and challenges in the worlds of finance and gaming.