This space is hosted by namefi_io
Space Summary
The Twitter Space explored the burgeoning phenomenon of NFT collateralized loans, which have captured the attention of professional lenders and market makers. The conversation shone a spotlight on the allure of NFT assets as collateral, particularly those with a rich provenance history. As professional lenders and market makers increasingly dip their toes into NFT collateralized loans, it signifies a notable trend towards the incorporation of NFTs in decentralized financial methodologies. The rapid pace of technological progress in the industry is driving swift advancements and a plethora of opportunities within the NFT sphere. Participants underscored the rapid expansion and evolving landscape of NFTs, indicating a bright future for NFT-based financial instruments.
Questions
Q: What type of assets become more appealing as collateral over time?
A: NFT assets with longer provenance and successful repayment histories.
Q: Who is increasingly participating in NFT collateralized loans?
A: Professional lenders and market makers.
Q: Why are mid-tier NFT assets initially gaining traction in the loan space?
A: Due to lower risk profiles compared to high-value assets.
Q: What key factor influences decisions between traditional asset funding and NFT collateralized loans?
A: Evaluating yield potential against associated risks.
Q: What trend has emerged among trading firms and market makers recently?
A: Incorporating NFT collateralized loans into their strategy mix.
Q: How has the pace of technology advancements in the NFT space been described?
A: Rapid and exceeding expectations.
Q: In what duration have significant industry shifts occurred compared to initial estimations?
A: Happening in a shorter time frame than predicted.
Q: What is the prevailing sentiment regarding opportunities in the NFT sector?
A: Enthusiasm and optimism about the increasing potential within the sector.
Highlights
Time: 00:19:41
Leveraging NFT Technology for Borrowing: Discussion on using NFT technology to enable borrowing against domain names.
Time: 00:22:01
Introduction to NeemFi and NFTfi
Key Takeaways
- NFT assets with longer provenance history become more appealing as collateral over time.
- Professional lenders are increasingly entering the NFT collateralized loan space.
- Market makers and trading firms are incorporating NFT collateralized loans into their strategies.
- Comparing yields and risks between traditional assets and NFT collateralized loans is a key consideration.
- Initial focus is on mid-tier NFT assets due to lower risk levels.
- The pace of technological advancements in the NFT space is accelerating.
- The expected timeline for significant industry shifts is shortening.
- Enthusiasm and opportunities in the NFT sector are growing rapidly.
Behind the Mic
And then what happens is over time, as these assets build up a little bit more history, build up longer provenance, have a history of successfully repaid loans. They become more appealing as collateral. And you start having more and more professional lenders come in and these more professional lenders, initially these started offers people that are defi native, NFT native who can write a bot, who then start kind of making a bit more professional bids. And now what you’re starting to see the last maybe twelve months or something like that is, you know, more professional market makers and trading firms actually adding in NFT collateralized loans into their strategy mix. So, you know, comparing, you know, what yield can they get for what risk, you know, funding perp futures or do versus doing a loan on an actual asset. So I suspect it’ll probably something similar will happen. You’ll have like a smaller community of people probably actually on the lower end, mid tier assets probably will be the first ones because, you know, multi million dollar domain is just quite risky. You know, lenders need to have quite a lot of trust that, you know, this asset is going to go missing or anything like that. So I actually think you’ll probably find the mid tier assets will, mid tier domains will probably gain traction first and then it’ll start moving up the stack and then, you know, like, I think the long tail maybe becomes a little bit more speculative. You know, the longer the domain is available, the more time it is for the data to exist to actually really value it properly. And then, you know, with more data, more price discovery, the professional lenders will kind of move in and really start capitalizing off that. So we’ll see. I think that’s, you know, that’ll be an evolution that will play out over the next twelve months. So, Andrew, it strikes me listening to you that like we’ll take the market as it stands now for undrawn BNB credit. There are behaviors that our customers will see on a consistent basis that will lead to an entry on their assessment record, or we sometimes call it a credit risk report, right? Or CRR of missed payments or misd sessions, they will accumulate those. What will be the equivalents for domain driven lending? At this point, what we’d basically be looking at is this essentially part of a trend we’re going to see in the next twelve months really start to evolve and having this conversation now, so people appreciate the complexity as we think this problem through and with that being said. Peter, thanks so much, man. Really appreciate the conversation. Any closing thoughts here as we wrap up? Well, I think it’s so exciting to see where the technology has gone. I think it’s only going to increase faster because two years ago, I imagine what’s happening now would happen before, would eventually happen, but I saw it as like a five to seven year thing, and it’s happened in less than two years. So I can only imagine where we’re, you know, where we’re heading next and how soon we’re going to get there. So I think it’s a huge opportunity. So thanks for having us and for arranging the space was really interesting. Yeah. Thanks, everyone. If you like this kind of conversation, follow Namefi, follow Sean and follow Stephen. And everyone who you hear interesting comments from will regularly hold this Namefi space. If you want to recommend some teams that we should talk to, please also reach out. My DM is always open. We really appreciate our distinguished guests coming over to talk with us. See you next time. All.”
