With more NFTs coming with perks alongside the usual bragging rights and (occasionally dubious) investment value, it hasn’t taken long for the notion of NFT borrowing and lending to materialise.
Why pay up front for an expensive NFT when you can have all the benefits of ownership at a fraction of the cost? And dodge fluctuating markets and investment uncertainty altogether.
Flowty, a peer-to-peer NFT lending marketplace on the Flow blockchain has raised $4.5 million in its first round of funding. The funding round was co-led by Greenfield One and Lattice Capital, two crypto investment firms.
It’s part of a new crop of finance products resetting the entry level of some costly NFT-based experiences, making them that bit more affordable and easy to swallow for new comers.
Flowty’s fund will be used for further platform development and building out the engineering as well as development team. Flowty co-founder Micheal Levy stated in an interview with CoinDesk, “We as a company are a technology platform that facilitates transactions between borrowers and lenders.”
He added, “Because it’s peer-to-peer, and because of how we set up our platform, we can provide our services to people without them needing to go through strict regulatory concepts. So our platform can be used by anyone – people who are traditionally unbankable, people who are in regions where they don’t have a robust financial system.”
How it works
Borrowers will create a listing on the Flowty marketplace for their NFT and include the desired loan amount, duration and rate. Lenders on the other hand, will choose what assets are attractive to them and deploy the capital, yield earnings during the loan period and receiving the assets if the borrower defaults.
Now your NFTs can earn you money while you still retain ownership.
Flowty takes a fee from each funded loan and holds onto the asset until the loan duration is complete. The loans can be denominated in either Flow blockchain stablecoins, tUSDT and FUSD.
“The peer-to-peer loan marketplace is the first core feature we built, but we’re working on a number of others,” Levy said. “Our more macro company vision is to be a kind of forefront to the financialization of NFTs.”
The platform also recently included for Flow’s native FLOW token and the USDC stablecoin.