Nexo and Three Arrows Capital have teamed up to provide a new NFT lending and art finance business.
Two of the choices offered as collateral for crypto credit lines on the site are the Bored Ape Yacht Club and CryptoPunks NFTs.
Nexo, the crypto lending and exchange platform, has partnered with NFT hedge fund Three Arrows Capital to develop an NFT Lending Desk. The new lending desk provides crypto credit backed by NFTs to over-the-counter (OTC) clients. Nexo was one of the first crypto lenders to allow clients to borrow stablecoins, Ethereum, and other cryptocurrencies in exchange for particular NFTs.
The service will first accept Bored Ape Yacht Club and CryptoPunks NFTs, with additional collections on the way, according to the business. Clients can also use issued lines of credit to support art purchases by using the borrowed monies to make additional NFT purchases.
Nexo Co-founder and Managing Partner Antoni Trenchev said in a statement to Cointelegraph:
“Our partnership with Three Arrows Capital is a definitive move towards providing financial instruments & Web 3.0-native MetaFi. As we continue to discover the full scope of this asset class, services like Nexo’s lending will be in high demand to unlock NFTs’ underlying value while allowing users to retain ownership.”
Nexo said it intends to expand its existing crypto credit issuance services by providing risk hedging, valuation, and liquidation methods to the NFT Lending Desk through its partnership with Three Arrows Capital. Three Arrows Capital was also the first NFT Lending Desk client to receive a Nexo NFT-collateralized crypto credit.
“We are pleased to work with Nexo and demonstrate our awareness of NFTs’ promise as a financial instrument – one that needs proper, high-quality financial instruments to be fully leveraged,” said Three Arrows Capital Director Kyle Davies.
Nexo wishes to expand its provision of investment-grade products as well as accessible and secure exposure to the NFT market in the coming months, according to the business.
Other lending platforms, such as NFTfi, ETNA Network, and Drops Loans, are providing comparable services to Nexo as the NFT-backed lending market grows and NFT utility grows.