X2Y2 lending venue taps NFTBank to price NFT collaterals
NFTBank has been chosen by X2Y2, the third biggest NFT marketplace on Ethereum, to power pricing information for its lending platform that enables users to utilize their non-fungible tokens as collateral.
Launched in September, X2Y2 Loans is a P2P, NFT-backed loan functionality where users with whitelisted projects can borrow ETH by staking NFTs to free up liquidity in their assets. Lending can be priced differently based on the rarity of NFTs.
The venue allows individual NFT holders to meet up with a liquidity provider to settle a loan term. Terms for the loan are entirely dictated by the two parties’ negotiation, and parameters include loan value, interest rate, repayment rate, the NFT value, loan duration, and APR. Once a loan offer is accepted, ETH is transferred to the borrower, and the corresponding NFT used as collateral is locked into a contract.
While NFTs are not the most liquid assets, NFT-backed loans help solve this issue by unlocking liquidity even when a holder cannot sell their NFTs.
NFTBank steps in to tackle the complex issue of NFT pricing; not only as every NFT unique, but sales transaction data is also extremely limited. It uses a machine learning-based statistical algorithm to provide price estimates for individual NFTs with 90+% accuracy.
The leading NFT valuation provider also leverages information such as the floor price, rarity, and bid/ask distribution to compute a single price value for any given NFT in a collection.
As such, X2Y2 loans users can use NFTBank’s price estimate as a standard when setting loan terms or making their investment decision. With a lot insights, NFT holders can see their portfolio’s value at a glance while lenders can find the best NFT for which they pitch liquidity.
NFTBank, which is backed by Hashed, DCG, and other notable investors, offers pricing information for over 5,000 NFT collections and makes them available both with APIs and its own dedicated app. It has already become the NFT valuation solution for key projects in the scene, such as MetaMask’s portfolio dapp, Chainlink, NFTfi, Pine, Stater, Unlockd Finance.
“X2Y2 Loans is meaningful in the sense that they are the first marketplace to move onto a loans platform. With more than 3,000 DAU, X2Y2 is trusted by plenty of buyers and sellers in the market. With the loan service on top of the marketplace, its users can make purchasing and lending decisions all in one platform. Just in two and a half months since its launch, X2Y2 became a top 3 NFT loan platform approaching 8000 ETH in total loan volume,” reads the announcement.