Bored Ape Yacht Club and CryptoPunks NFTs are two of the options supported as collateral for crypto credit lines on the platform.
Nexo, the crypto borrowing and exchange platform, has launched an NFT Lending Desk in partnership with NFT hedge fund Three Arrows Capital. The new lending desk caters to over-the-counter, or OTC, clients to offer crypto credit backed by NFTs. Nexo is one of the first crypto lenders to allow customers to borrow stablecoins, ETH, and other cryptocurrencies using certain NFTs as collateral.
The company stated that in its initial iteration, the service will accept Bored Ape Yacht Club and CryptoPunks NFTs, with more collections on the way. Clients can also use issued lines of credit as a means of art financing by executing further NFT purchases with t borrowed funds.
In a statement shared with Cointelegraph, Nexo Cofounder and Managing Partner Antoni Trenchev said:
“Our partnership with Three Arrows Capital is a definitive move towards providing financial instruments & Web 3.0-native MetaFi. As we continue to discover the full scope of this asset class, services like Nexo’s lending will be in high demand to unlock NFTs’ underlying value while allowing users to retain ownership.”
Related: Fidelity and Nexo are entering institutional lending market
By collaborating with Three Arrows Capital, Nexo said it hopes to expand its existing crypto credit issuance services by providing the NFT Lending Desk with risk hedging, valuation and liquidation mechanisms. Additionally, Three Arrows Capital became the first NFT Lending Desk client with an NFT-collateralized crypto credit issued by Nexo.
Three Arrows Capital Director Kyle Davies added that they are “happy to partner with Nexo and demonstrate our recognition of NFTs’ promise as a financial instrument – one that requires appropriate, high-quality financial tools to be fully leveraged.”
Related: Three Arrows buys 156K ETH in the weeks after CEO ‘abandoned ETH’
In the coming months, Nexo said it plans to increase its offerings of investment-grade products and accessible and secure exposure to the NFT market, according to the company.
As the NFT-backed lending market grows and NFT utility increases, other lending platforms such as NFTfi, ETNA Network and Drops Loans are also offering similar services to Nexo.
