A DeFi advisor shared how a physical luxury watch was used as collateral for an NFT loan.
loan was collateralized through a luxury watch and was facilitated with an NFT representing the asset.how a user was able to borrow $35,000 from another user by using an NFT that represented a physical item as collateral for the loan.
According to the exec, a user sent a Patek Phillipe luxury watch to 4K Protocol, an escrow firm that deals with NFTs backed by physical items. The company then sent back an NFT that represents ownership of the watch.on the DeFi lending protocol Arcade. After listing the item, lenders pitched their offers to the borrower. The user then accepted the best loan offer they could find.
CirrusNFT explained that through this process, users can lend and borrow with complete anonymity. Lenders and borrowers do not need to submit their names to each other to go through the process. In addition, the executive believes that this allows people to have access to more global liquidity, which may offer more competitive rates.
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