What can the integration between DeFi and NFTs mean for the global monetary landscape

Global financial systems and institutions seem to be on the search for an asset class that would ensure liquidity without the intervention of central authorities, and non-fungible token (NFT)-based loans is believed to be the answer. From a monetary expert’s perspective, the integration between decentralised finance (DeFi) and NFTs can enable investors to use their NFTs as collateral in return for cryptocurrencies or fiat currency.

According to Nansen, a cryptocurrency and blockchain analytics platform, highest NFT-based trading happened around August 29, 2021, which witnessed sales for 132,000 ETH, worth $422 million. The platform also highlighted on the developments around smart money related to this section, with the top 10 NFT traders recording over $185 million in profits. “I believe NFTs can be put up as security for a loan. The NFT is locked into a smart contract, once it has been agreed upon for a specific period of time or until the borrowed amount (plus interest) is repaid. In the event that the borrower is unable to make the loan payment on time, the NFT is

transmitted to the lender’s wallet as security for the outstanding balance,” Abhay Aggarwal, founder…

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