TrustNFT, Aims To Create A Decentralized Loan Marketplace Backed By NFTs As Collateral
NFT – three letters that have been spinning the world of crypto, art, and finance. Only in the first half of 2021 NFT sales volume surges to $2.5 billion. From cartoons of ape or Twitter tweet, to the digitized art masterpieces, NFTs undoubtedly became not only part of the internet culture but also has the potential to become a financial instrument.
With skyrocketing NFT prices, the question arises of how to determine the price and value of the asset to ensure the maximum benefit to the investor? The NFT market, which is still developing, faces significant challenges in providing liquidity, monetizing assets, and, most importantly, evaluating the NFT.
Enters TrustNFT AI Platform
NFT related financial services are emerging in the market, like offering NFT collateralized loans; however, accurate evaluation is crucial to all solutions of using NFTs as collateral.
TrustNFT, a decentralized NFT loan, and marketplace is aiming to create a community where NFTs could be used safely as loan collateral. The platform is the first one in the market to implement a reliable way to evaluate NFT by using breakthrough AI technology and Big Data.
“There are such companies in the market that evaluate NFT prices, but no company currently utilized the help of AI. There are some AI solutions to trades in crypto to just guess the future price of crypto assets, but not especially NFTs, because the price depends on rarity and current status in the market,” said Mantas Mackevicius, CTO at TrustNFT.
The NFT evaluation machine created by the TrustNFT, uses data sources not only from blockchain but also constantly learns to define trends in the NFT market and the crypto market in general.
TrustNFT founders believe that empowering the NFT community to use NFTs as collateral and for loans will bring many benefits to the NFT collectors and investors alike by promoting liquidity and accurate pricing for the NFT portfolios.
The role of community
There are few NFT marketplaces where the NFT can be used as collateral to get a loan. The community’s role in those marketplaces is to evaluate NFTs by voting. Although the TrustNFT AI aims to automate this process, the community is not to be left entirely aside.
CTO at TrustNFT agrees that AI is a complex technology that needs a lot of data to learn and function, so the important role of the community in providing necessary data remains. Community voting will happen with the creation of a Decentralized Autonomous Organization (DAO).
Nawab Hussain, director of Crypto Consultants UK, commented that the NFT market has already surpassed the phase of just being a place for creatives to share their artwork. “It is becoming the means to a large economy,” notes Hussain.
Even though the NFT space is still in its infancy, he believes that the vast expansion of the NFT finance market will be seen within the next five years.
“We see the NFT market also becoming a means of verification for physical items such as high-value watches or even sneakers. We are starting to see large corporations delve into that side of the NFT space,” said Hussain.
NFT collateralized loans
As seen through house mortgages, physical assets can be used as financial instruments through collateralization. One of the ways to use NFTs as financial instruments is NFT collateralized loans.
NFTs are easily exchanged and will soon be easy to value at the fair market. This provides the necessary liquidy, and shortly, NFTs will give users an easy and secure way to use many digital and physical assets as collateral for loans.
Vismantas Motiejūnas, CEO at TrustNFT, a decentralized NFT loan, and marketplace, notes that the potential of NFTs is endless, and it can be used to generate profit to the investors:
“We came up with the idea of how people could monetize their current NFTs. We offer a solution not to sell their assets but use their NFTs as a collateral, thus getting liquidity and ability to invest in other projects. This allows the option of not freezing their NFT assets’ value,” said Motiejūnas.
How It Works
The platform allows NFT owners to accurately evaluate NFTs and secure it as collateral with an AI-powered TrustNFT Evaluation Machine. By using Big Data, it determines the maximum borrow limit for a particular asset. If the user agrees or chooses to this loan term and LTM, the asset is locked in TrustNFT smart contract until the loan is completely refunded.
“I believe NFTs will evolve to be integral digital assets on every new platform we know. Moreover, NFTs will find their place in the banking industry as well. We have seen their role increase in the gaming sphere, therefore the rest is just a matter of time,” Mackevicius, CTO at TrustNFT shared.
The future of NFT
There are some fears that the NFT market is overheating. However, Mackevicius believes that it is expected that all the new technologies are met with doubts and need to be widely accepted. NFT is still fresh, but he sees new opportunities unlocked by this technology.