December 19, 2022 – Seoul, Korea
Over the past two years, NFT financialization infrastructure has emerged along with the rise in popularity of NFTs. Branching out further from NFT marketplaces and aggregators, recent trends show NFT-backed loans, NFT rentals and NFT derivativesplatforms serving trading activity for NFTs as collectibles.
Following this trend, X2Y2, the third-biggest NFT marketplace in the world with a total trading volume of over $950 million, launched its own NFT loans platform this September.
X2Y2 Loans is a P2P (peer-to-peer) lending platform, where individual NFT holders meet up with an individual liquidity provider to settle a loan term. The two parties negotiate the loan term based on the value of the NFT, such as LTVs, interest rate and loan duration.
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.
However, in this case, knowing the accurate value of the NFT becomes extremely important. Loan terms are negotiated based on the value of individual NFTs, and recognizing the correct collateral value allows lenders and borrowers to settle on more fair and diverse loan terms.
In an attempt to provide its users with accurate NFT pricing data, X2Y2 partnered with NFTBank, the leading NFT valuation provider.
For a long time, NFT pricing has been a complex issue. Not only is every NFT unique but also sales transaction data is extremely limited. And NFTBank has sought to tackle this issue from the earliest days of NFTs.
The years of work led to an advanced machine learning-based statistical algorithm to provide price estimates for individual NFTs with over 90% accuracy. By using information such as floor price, rarity and bid/ask distribution, NFTBank’s ML model computes a single price value for any given NFT in a collection.
With NFTBank’s valuation supporting every single NFT listed on X2Y2 loans, users can now make better decisions with a lot more insight than before when setting loan terms. For instance, borrowers can more efficiently decide on how much to put up their NFT to borrow against, and lenders can easily look for which NFT to provide liquidity for.
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 three NFT loan platform approaching 8,000 ETH in total loan volume.
Meanwhile, NFTBank has already become the NFT valuation solution for key projects in the scene.
Recognized for its NFT pricing information, NFTBank has recently integrated into MetaMask’s portfolio DApp, while also providing data for Chainlink, NFTfi, Pine, Stater and Unlockd Finance. NFTBank is supported by Hashed, DCG and other partners and investors.
NFTBank is an NFT portfolio management tool and valuation engine, allowing users to make informed decisions about their NFT portfolio and enable advanced DeFi use cases.
NFTBank’s ML-powered NFT valuation engine covers over 5,000 projects with high accuracy. You can find more information about NFTBank here.
Jen Kim, head of product at NFTBank