NFTFi (Non-Fungible Token Finance) is a new type of financial application that uses non-fungible tokens (NFTs) as collateral for loans, lines of credit, and other forms of financing.
A new option appeared on the cryptocurrency market. NFTs can now be used as collateral to borrow in crypto or fiat currency. Previously, traditional assets were used as collateral, such as property or shares.
NFTFi can also enable the creation of new types of financial assets, such as “tokenized” ones, which represent a fraction of ownership of an asset.allowing investors to access a portion of an asset’s profits without having to fully acquire it, Cointelegraph reported.
“Although NFTFi is still a relatively new concept, it is being targeted by investors and developers in the cryptocurrency community as a way to broaden the use and adoption of NFTs in the financial world,” they said from the same website.
One of the uses is staking. NFT owners can use their assets as collateral to participate in NFT staking systems, allowing them to earn rewards for holding their NFTs.
One of the main differences between NFTFi and DeFi is that the underlying asset is focused on NFTs (non-fungible tokens), while in DeFi, it is focused on crypto assets (such as BTC, ETH, and other tokens).
On the other hand, the NFTFi focuses on lending and other financial products that use NFTs as collateral, while DeFi focuses on a wide range of decentralized financial products-
Source: Ambito
I am a 24-year-old writer and journalist who has been working in the news industry for the past two years. I write primarily about market news, so if you’re looking for insights into what’s going on in the stock market or economic indicators, you’ve come to the right place. I also dabble in writing articles on lifestyle trends and pop culture news.
