Nexo, the crypto borrowing and exchange platform, has launched an NFT Lending Desk in partnership with NFT hedge fund Three Arrows Capital.
It has been reported that the new lending desk caters to over-the-counter (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.
However, 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.
Antoni Trenchev, the Co-founder and Managing Partner of Nexo, 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.”
The report said that 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.
Likewise, Kyle Davies, the Director of Three Arrows Capital, said 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.
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.
Thus, 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.