Weeks after Blur launched its NFT lending platform, Binance launched its non-fungible tokens (NFT) loan feature, enabling users to borrow Ether (ETH) using blue-chip NFTs as collateral. The launch comes around two years after Binance launched its NFT marketplace.

Binance Users Can Now Borrow ETH with NFTs

On Thursday, Binance, the world’s leading crypto exchange, forayed into the NFT lending market. The company launched a new feature that allows users to borrow cryptocurrencies using popular NFTs, including Bored Ape Yacht Club (BAYC), Mutant Ape Yacht Club (MAYC), Azuki, and Doodles. At the moment, users can only borrow Ether (ETH).

According to Binance’s NFT web page, the current interest rate on token loans stands at 7.91% p.a, while the loan-to-value ratio is 40% to 60%. Meanwhile, users will not be charged for Ethereum gas fees.

Binance first rolled out its NFT marketplace roughly two years ago, in June 2021. Earlier in May, the crypto exchange giant announced it would add support for Ordinals, also called Bitcoin NFTs, due to surging demand.

Blur and Binance Join NFT Lending Space Despite Activity Crunch

The launch of the lending feature comes just weeks after Blur, one of the leading NFT platforms, introduced its lending protocol, Blend. The peer-to-peer (P2P) protocol enables borrowers to make smaller down payments to gain exposure to blue-chip assets. Additionally, it allows them to discuss specific terms with the lenders, such as acceptable collateral and the interest rate.

Blend witnessed a total volume of 6,406 ETH in the first 24 hours of its launch, with borrowers expressing particular interest in Azuki, Cryptopunks, and Milady NFT collections. Blur likened Blend to purchasing a house – allowing investors to place a down payment for an asset and pay off the rest of the debt through mortgage payments.

The NFT market is seeing a contraction in 2023 as daily trading volumes plummet notably compared to earlier highs, according to a report by Galaxy Digital published earlier this month. It revealed that Blur’s dominance in the NFT space hit an all-time high of 80%.

“The top 1% of Blur traders account for 64% of the platform’s volume,” the report showed, compared to just 20% on OpenSea. Still, NFT activity remains higher than the 1-year low seen in November 2022 amid the broader crypto downturn.

This article originally appeared on The Tokenist