More investors will be looking for ways to leverage their NFTs as a result of Alibaba's NFT push.

Alibaba, the world's largest e-commerce company, has startled the crypto community by unveiling a non-fungible token marketplace. Alibaba's NFT marketplace, according to the South China Morning Post, allows customers to not only purchase and trade NFTs, but also license intellectual property (IP) copyrighted by blockchain technology. Musicians, writers, artists, and game developers are among the creators targeted by the marketplace.

The “New Copyright Blockchain,” administered by the Sichuan Blockchain Association Copyright Committee, will mint multi-billion dollar market NFTs sold on Alibaba's Auction platform.

The Chinese government has taken steps to regulate cryptocurrencies, but it is optimistic about blockchain technology. Chinese authorities are enabling the integration of blockchain into important industries by allowing Alibaba to sell NFTs as part of their long-term aim to become the world's leading blockchain power by 2025.

Alibaba has entered a crowded yet quickly expanding market. Players such as OpenSea, Rarible, Makersplace, and others would pose a threat. The Chinese behemoth will make every effort to dominate the market by bringing NFTs to the general public.

NFT sales volume soared from $13.7 million in the first half of 2020 to a startling $2.5 billion in the first half of 2021, according to statistics provided by DappRadar. As the market for NFTs grows in terms of volume and adoption, the crypto community needs a long-term strategy for making the most of these assets.

Using NFTs in the Workplace

As more people obtain non-fungible tokens (NFTs), there is an increasing demand to put these assets to use in order to lower the opportunity cost of keeping them. The problem with NFTs is that you may never be able to get them back once you've sold them. As a result, you might decide to preserve them for a long period.

Many people purchase collecting NFTs with the goal of subsequently reselling them for a profit. What if you don't want to part with your cherished possession? What if you don't want to sell your NFTs in order to get funding? Perhaps to buy the dip, profit from arbitrage chances, dodge margin calls on collateralized debt holdings, or do something different.

There are marketplaces that offer trustless loans against NFT assets, which is fortunate for such users. To have access to liquidity, you can use your NFT as collateral. Lenders can make loans with confidence since they will receive the NFT that was deposited as collateral in the worst-case scenario, such as foreclosure. People looking for a high rate of return can invest in NFT lending pools and back the assets they believe in.

Drops is a non-custodial peer-to-peer lending platform where you may borrow against your NFTs and earn interest on your idle NFTs. It enables high-liquidity NFT loans to be made instantly. Drops determines the value of NFTs using Chainlink Price Feeds, and then mints ERC20 tokens to represent the NFT. Users' loan-to-value (LTV) ratios are monitored using the same Chainlink Price Feeds to ensure that it is maintained during the loan term.

The ERC20 tokens are used as a form of collateral against which loans can be obtained. Borrowers receive the same NFT that they had put as security when they pay off the loan with interest, not another NFT of equivalent value.

Some NFT owners charge a fee to rent out their assets. If you have collector NFTs that you don't want to sell, you can rent them out to make some money in the interim. People who wish to borrow your NFTs can do so for a fraction of the price of purchasing them outright.

On their markets, platforms like Yiedl Finance and Flow feature the "rent" capability. You get to choose the rental pricing, length, and NFT price as an NFT owner. Borrowers will be required to put the NFT price up as collateral before renting it, eliminating the danger of theft.

Bringing things to a close

Non-fungible tokens will go well beyond digital art and collectibles as they gain more importance and attention. The rising popularity of NFTs has prompted investors to look into the possibility of gaining liquidity and earning a return while retaining their NFT assets for the long term. And this is only the start!


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