NFT lending platform NFTfi has launched the first phase of its loyalty program, NFTfi Rewards. Earn Season 1 offers users exclusive reward points for engaging in borrower-friendly loans and responsible lending practices.
Amid the rapid growth of the NFT space, NFTfi aims to establish healthy credit markets as a fundamental driver of overall industry expansion. The design of Earn Season 1’s reward structure aligns with this objective by incentivizing responsible NFT lending and contributing positively to the NFT ecosystem.
NFTfi co-founder and CEO Stephen Young expressed the company’s commitment to fostering a healthy lending environment, saying, “We believe that NFT lending is a crucial part of the future of the NFT space, and we’re committed to promoting a healthy and non-predatory lending environment through our new loyalty program.”
The calculation of Earn Points, the basis for the reward system, follows a set of principles. Points are exclusively earned by repaid loans, encouraging lenders to manage default risks through conservative loan-to-value ratios (LTVs) and urging borrowers to avoid excessive debt.
The number of points earned increases with larger and longer loans, motivating lenders to provide flexible access to various loan sizes and durations. Moreover, loans with lower interest rates (APR) garner the highest number of points, motivating lenders to offer borrower-friendly interest rates and appropriate LTVs.
NFT lending protocols like @NFTfi, open the door for multiple use cases for collectors/galleries/museums/institutions…
Imagine a future where you can loan your NFTs to a museum and get rewarded? https://t.co/lwmQOnbwJ0
— Kaloh (@Kaloh_nft) May 15, 2023
The Earn Points are acquired through the repayment of eligible loans. Once a new loan is obtained, the associated Earn Points are displayed as “unsecured points” in the NFTfi Rewards cockpit. Upon loan repayment, these points transition into “secured points.”
The NFTfi Leaderboard tracks both unsecured and secured Earn Points. At the end of Season 1, the top 500 wallets with the most secured points will receive a multiplier of up to 2.5x on their final balance.
Several measures have been implemented to ensure that the program rewards genuine users and discourages wash loans.
Loans with an APR below 2 percent or a duration of fewer than three days are not eligible for points. Furthermore, points are not awarded to related wallets.
Although Earn Points are currently nontransferable and not redeemable, they serve as an indicator of user loyalty within the NFTfi platform.
However, certain individuals, including U.S. residents and individuals in the U.S., are ineligible to participate in the NFTfi Rewards loyalty program. Users can find more information about Earn Points and other details in the dedicated FAQs section.
Read the official blog post for everything you need to know 👇
Blog Post: https://t.co/72dcK6Cm6I
— NFTfi.com (@NFTfi) May 15, 2023
The global NFT lending market is experiencing rapid growth, projected to reach $13.6 billion by 2027, according to MarketsandMarkets.
NFT lending provides liquidity by allowing NFT holders to use their digital assets as collateral for loans. It addresses challenges such as the lack of traditional financing options for NFT holders and the need for a healthy credit market within the NFT space.
Blend Protocol, another emerging NFT lending platform from Blur, has been rapidly gaining traction in the market, facilitating over 75,000 ETH (approximately $135 million) in loans within a mere two weeks.
NFT lending platform BendDAO also has experienced a significant increase in demand for loans backed by NFT collateral. The recent deposit of 59 Mutant Ape Yacht Club NFTs into BendDAO exemplifies the growing interest in utilizing NFT assets for financial purposes.
This trend is reflected in the broader NFT lending market, which recently reached a six-month high with a weekly volume of $67 million.