NFTfi, a leading NFT lending platform, has announced the launch of Earn Season 1, the next phase of its loyalty program, NFTfi Rewards.
NFTfi launches Earn season 1: Fostering responsible NFT lending
The objective of the program is to encourage responsible lending in the expanding NFT market and cultivate a robust credit environment. During Earn Season 1, participants have the opportunity to accumulate exclusive reward points by engaging in borrower-friendly loans and displaying responsible lending behavior.
Stephen Young, the Co-Founder and CEO of NFTfi, expresses the platform’s conviction that NFT lending holds significant influence over the trajectory of the NFT space. In order to establish an environment that promotes responsible practices and avoids predatory lending, NFTfi has launched this loyalty program. Young underscores the significance of incentivizing responsible lending behaviors within the NFT ecosystem.
Incentivizing responsible behavior
The calculation principles of Earn Points are designed to incentivize responsible conduct among lenders and borrowers. Points are exclusively earned through repaid loans, which encourages lenders to mitigate default risks by utilizing conservative loan-to-value ratios (LTVs) while discouraging borrowers from acquiring excessive debt. Additionally, higher points are awarded for larger and longer loans, granting borrowers greater flexibility in terms of loan sizes and durations. Loans with lower interest rates (APR) are also prioritized, motivating lenders to provide borrower-friendly rates and risk-appropriate LTVs.
Earning, securing, and winning: The journey of earn points in NFTfi
By fulfilling the obligation of repaying qualifying loans, participants accrue Earn Points. Initially, these points are classified as “unsecured points” and can be accessed in the NFTfi Rewards cockpit for review. Once the loan has been fully repaid, these points undergo a transformation, becoming “secured points.” Both unsecured and secured Earn Points are showcased on the NFTfi Leaderboard, which provides visibility to users. As Season 1 draws to a close, the 500 wallets that have accumulated the highest number of secured points will be granted a multiplier of 2.5x, boosting their final balance.
NFTfi: empowering NFT holders with decentralized lending
NFTfi.com is a highly successful decentralized lending platform that operates on the Ethereum blockchain, fostering peer-to-peer transactions. This platform empowers NFT holders to borrow ETH, USDC, and DAI cryptocurrency, leveraging their non-fungible tokens as collateral. The utilization of smart contracts ensures secure and transparent interactions directly between borrowers and lenders. NFTfi provides NFT holders with the means to unlock the value of their assets, accessing liquidity, while enabling lenders to earn interest on their funds. Since its establishment in May 2020, users have engaged in transactions exceeding $400 million on the NFTfi smart contracts.
According to a report by MarketsandMarkets, the global NFT lending market is undergoing rapid expansion and is projected to reach a valuation of $13.6 billion USD by 2027. NFT lending offers notable advantages, including the provision of liquidity to NFT holders who can employ their assets as collateral for loans. Moreover, it addresses crucial concerns such as the limited availability of traditional financing options for NFT holders and the necessity for a robust credit market within the realm of NFTs.
Proceed with caution: Assessing the risks in NFT lending
NFTfi is dedicated to recognizing and rewarding authentic users while actively discouraging wash loans through a range of measures. Loans characterized by APRs below 2% or durations shorter than 3 days, as well as associated wallets, are ineligible for earning points. It is important to emphasize that, although Earn Points are presently non-transferable and cannot be redeemed, they serve as an indication of the loyalty level exhibited by NFTfi users. Additionally, it should be noted that certain individuals, including US residents and those situated within the US, are not eligible to participate in the NFTfi Rewards loyalty program.
Nevertheless, users are strongly advised to exercise caution and diligently assess their risk tolerance and investment objectives before embarking on loans. It is crucial to recognize that investments in loans inherently carry risks, and the value of NFTs can be exceedingly volatile.