October 31, 2022

NFT 2.0 Trend: Unlocking NFT Liquidity

The number of NFT holders has grown exponentially in the past two years, from approximately 460,000 in 2020 to over 4.6 million in 2022. With the projects like Goblintown.wtf, Piece Of Shits, and growing interest in Bored Ape Yacht Club, CryptoPunks, and so on, investors, creators, and even conventional corporations are making a positive impact in the NFT space and strong profits along the way.

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NFT market and growth over the years

NFT market and growth over the years

NFT Marketplaces Are Stepping Stone to NFT 2.0

NFTs are extremely popular, and often valuable assets to hold. NFT marketplaces allow NFT owners to sell their NFTs for the highest price. Purchasing the hot, on-demand NFTs at the lowest price is the goal of buyers. Marketplaces provide a platform for these buyers and sellers to execute transactions safely.

But for blue-chip NFTs holders, their assets are illiquid.

NFT assets have not yet evolved into tangible financial products. 

NFT Lending and Borrowing: Unlocking NFT Liquidity

New, innovative platforms are now emerging that enable NFT holders to unlock liquidity by borrowing against the value of their assets. These platforms bring about a peer-to-peer lending opportunity for individuals to lend capital for a set interest rate, backed by the value of the borrower’s underlying NFT asset. 

Bringing flexibility to those posting their NFTs as collateral - NFT 2.0 platforms allow setting loan terms and duration, and choosing whether cryptocurrencies or stablecoins are loaned against the assets. What's more, no credit or background checks are required.

NFT 2.0 platforms offer benefits for lenders too. As well as getting the opportunity to earn interest on their digital assets, they have a chance to acquire a blue-chip NFT at a heavily discounted price if a loan goes unpaid.

NFT lending and borrowing platforms may eventually also help provide greater levels of stability in the wider market, helping to prevent wild swings in the valuations of top-tier tokens. Floor prices of the NFTs could become immune to huge drops, as holders would have a way of remaining part of the community without selling up.

Liqdnft.com is creating the next iteration of NFT marketplaces by unlocking the value of NFTs without selling them with a decentralized peer-to-peer NFT lending platform.

Future Development

We are also producing multiple proof of concepts around listing tangible, real-world assets on the Liqd platform. We believe NFTs will also hold value as certificates of ownership and even represent valuable assets like Real Estate, Physical Art, Rare Wine, etc. thereby bridging the gap between the real world and Web 3.0. This will also facilitate the trading of tangible assets on Web 3.0 like never done before liquidating them easily.

With some NFTs now selling for hundreds of thousands of dollars — if not millions — this new infrastructure could be the silver bullet that encourages more high-net-worth individuals to discover what digital art is all about. And as a growing number of big brands release their own crypto collectibles, NFT 2.0 platforms will play a tangible role in helping nonfungible tokens mature as an asset class.