- The round was led by Variant and Fintech Collective.
- NiftyApes aims to generate value for the borrower by putting lenders in competition to offer the best terms throughout the loan period.
- Borrowers lock their NFT in NiftyApes to accept any loan offer they choose.
NiftyApes, a lending protocol that enables lending on any NFT or collection, today announced that it has raised $4.2 million in a funding round led by Variant and Fintech Collective.
Other investors include Robot Ventures, Polygon, Coinbase Ventures, The LAO, FlamingoDAO, Ryan Sean Adams, David Hoffman, Eric Conner, Anthony Sassano, Cyrus Younessi, DC Investor, James Young, James Duncan, Nadav Hollander, Brendan Forster and the Founders . of SuperRare and Rare.
The funds will be used to grow its seven-person team and continue to expand as the company actively hires.
NiftyApes offers an active loan auction for every theoretical asset or collection that exists. While traditional debt markets prioritize returns for capital holders while foregoing lender returns and borrower exposure to better terms, NiftyApe instead applies this method to lenders rather than debtors. borrowers by facilitating an ongoing auction for the right to interest earned on each loan.
When a loan offer is executed, the lenders do not own the loan but hold the rights to the interest payments and the security in case of default. They have interest and default rights as long as they offer the best conditions for the Borrower.
Ongoing auctions generate value for the borrower by ensuring that lenders compete to offer the best terms to the borrower over the life of the loan. Borrowers can refinance any loan offer they choose, as many times as they want.
For example, if the lender sets the terms of the loan below market, other lenders will refinance the loan at better terms. Set terms too high above the market and the lender could lose money by overvaluing the asset. As the value of the loan-to-value ratio (LTV) increases, lenders compete to offer better terms in order to be entitled to interest payments and exposure to the underlying collateral.
Lenders deposit capital to earn a return and make offers on any existing NFT asset or collection, and successful offers receive interest and default fees for the assets while borrowers lock their NFTs into NiftyApes for instant liquidity.
Another NFT-backed lending platform, MetaStreet, recently bred 10 million dollars to finance the development of its products. DeFi lending platform and peer-to-peer marketplace, Arcade, went live in April, allowing users to take out loans using NFTs as collateral.
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