NBA Top Shot CEO Backs Platform for Loaning Out NFTs

Are you sitting on a fat stack of crypto art worth thousands of dollars but find yourself strapped for cash? Then here’s the marketplace for you.

NFTfi is a peer-to-peer platform that lets its users pawn their crypto art tokens and take out loans (rather than, say, selling the art and parting with it forever). The project today announced that it has received $890,000 in funding from top NFT companies and execs, among them Roham Gharegozlou, the CEO of Dapper Labs, the NFT company behind CryptoKitties and NBA Top Shot crypto trading games.

NFTs, or non-fungible tokens, are crypto-collectibles that function as a certificate of authenticity for things, often artworks or trading cards. These days, NFTs can sell for millions of dollars each. The money and the vibrant community have attracted established digital artists, such as Beeple and Refik Anadol. (Beeple, incidentally, recently caught the eye of The New York Times; he made more than $3 million in a single weekend by hawking his NFT-based artwork.)

NFTfi, created by South African developer Stephen Young, lets users stake Ethereum-based NFTs as collateral for loans. Anyone borrowing an NFT could use it in, for instance, a crypto-based video game, or display it in an NFT-only art gallery. 

Since the launch of its public beta in June, NFTfi has facilitated more than $1.5 million in crypto loans. NFTfi helps users earn interest for these loans, paid out in Ethereum (ETH) or WETH (Wrapped Ether, a derivative of ETH). 

NFTfi is one of several companies working on creating new ways to trade NFTs. Rarible, an NFT marketplace, started issuing governance tokens last summer to people that used the platform. The tokens shot up in value, incentivizing more trading.

And Singapore-based NIFTEX makes it possible to fractionalize those NFTs into thousands of fungible ERC20 tokens. That means that you can buy a cut of a piece of crypto art, and trade that cut on a cryptocurrency exchange, just like you can trade cuts of a Bitcoin. 

Crypto licensing brand company Animoca Brands also invested. Animoca is building several crypto games, such as “The Sandbox,” a kind of Minecraft-meets-crypto-micropayments open world game, and “F1 Delta Time,” a Formula 1 racing game with...micropayments. The COO of “The Sandbox” was also among investors.

Most NFTs are based on the Ethereum blockchain, although Dapper Labs is building Flow, a blockchain dedicated to NFTs, that seeks to overcome Ethereum’s problems with high transaction fees and slow transactions times. 

NFTfi will use the money to build out the platform, support more blockchains, including Flow, and build a governance token to let its community run the show.