NFT Lending Guide: Borrow Against NFTs with Blur, BendDAO & NFTfi
Your NFTs don't have to just sit in your wallet. NFT lending lets you unlock liquidity without selling—but the risks are significant. Learn how to borrow safely against your digital collectibles.
- NFT lending lets you borrow ETH using NFTs as collateral—without selling them.
- LTV ratios are 40-50% typically; liquidation happens if floor drops below threshold.
- Thrive monitors your NFT loan health and alerts before liquidation thresholds.
NFT Lending Calculator
Calculate borrowing capacity and compare platforms for your NFT:
Platform Comparison
Liquidation Risk
If floor price drops below your liquidation threshold, your NFT will be seized. NFT floors are volatile—borrow conservatively and monitor positions closely.
NFT Lending Fundamentals
NFT lending bridges the gap between illiquid digital assets and usable capital. Instead of selling your Bored Ape, you can borrow against it—but this convenience comes with meaningful risk.
How NFT Collateralized Loans Work
- Deposit NFT: Transfer your NFT to the lending protocol's smart contract
- Receive loan: Borrow ETH or stablecoins up to the LTV limit
- Pay interest: Interest accrues on your borrowed amount
- Repay loan: Return principal + interest to get your NFT back
- Or get liquidated: If floor drops below liquidation threshold, you lose the NFT
Key Terms
Floor Price: The lowest listed price for an NFT collection. Used as collateral valuation.
LTV (Loan-to-Value): Percentage of floor price you can borrow. 50% LTV on a 10 ETH floor = 5 ETH max loan.
Liquidation Threshold: The LTV at which your position gets liquidated. Usually 70-85%.
Health Factor: Ratio of collateral value to debt. Below 1.0 = liquidation risk.
The Core Trade-Off
NFT lending gives you capital without selling—but floor prices are volatile. A 30% floor drop can liquidate a 50% LTV position. You're essentially betting floors won't crash during your loan term.
Critical Warning: NFT floors can drop 50%+ in days during market downturns. In the 2022 bear market, many blue-chip floors fell 70-90%. NFT loans amplify downside risk—only borrow amounts you can afford to lose the collateral for.
NFT Lending Platforms Compared
Blur Lending (Blend)
Model: Peer-to-pool with perpetual loans (no fixed duration)
Strengths: Instant loans, competitive rates, dominant market share, no expiration
LTV: Up to 50% for blue-chips
Interest: Variable based on utilization; typically 20-40% APR
Liquidation: Dutch auction when loan is called; 30-hour window to refinance
Best for: Blue-chip holders wanting quick liquidity with flexible terms
BendDAO
Model: Peer-to-pool with algorithmic rates
Strengths: Flash claims (borrow for instant NFT purchases), established protocol
LTV: 30-40% for most collections
Interest: Variable; typically 30-60% APR
Liquidation: 48-hour auction with reserve price protection
Best for: Users wanting protocol-backed loans with liquidation protection
NFTfi
Model: Peer-to-peer marketplace (lenders make custom offers)
Strengths: Negotiable terms, potentially better rates, supports more collections
LTV: Negotiated; can be higher than pool-based platforms
Interest: Varies by offer; often 10-30% APR
Liquidation: Lender takes NFT if borrower defaults (no auction)
Best for: Borrowers with rare NFTs or wanting custom terms
Arcade
Model: Peer-to-peer with wrapped loan notes
Strengths: Supports NFT bundles, loan notes are tradeable
Best for: Complex deals, bundled collateral
| Platform | Model | Max LTV | Typical APR | Best Feature |
|---|---|---|---|---|
| Blur (Blend) | Peer-to-pool | 50% | 20-40% | Instant loans |
| BendDAO | Peer-to-pool | 40% | 30-60% | Flash claims |
| NFTfi | Peer-to-peer | Negotiable | 10-30% | Custom terms |
| Arcade | Peer-to-peer | Negotiable | Variable | Bundle support |
When to Use NFT Lending
Legitimate Use Cases
1. Short-term liquidity needs:
- Need ETH for an opportunity but don't want to sell your NFT
- Covering expenses while waiting for ETH unlock/transfer
- Arbitrage opportunities requiring temporary capital
2. Tax optimization (consult a professional):
- Borrow instead of sell to defer capital gains
- Access liquidity without triggering taxable events
- Jurisdiction-dependent; get proper advice
3. Yield strategies:
- Borrow ETH against NFT, stake it for yield
- If yield > loan APR, net positive (but risky)
- Requires careful math on rates and risks
Dangerous Use Cases
1. Leveraged NFT buying:
Borrow against NFT to buy more NFTs, borrow against those too. This works great in up markets and devastates in down markets. Cascading liquidations can wipe out everything.
2. Funding lifestyle:
Using NFT loans for everyday expenses with no repayment plan. If floor drops, you lose the NFT AND still have the expense.
3. Max LTV borrowing:
Borrowing the maximum amount leaves no buffer. A 10% floor drop can trigger liquidation. Always leave margin.
Managing NFT Loan Risks
Monitor Floor Prices Religiously
Your health factor depends on floor price. Set up alerts for:
- Floor drops of 5%, 10%, 15% from your entry
- Health factor approaching 1.2 (warning zone)
- Large listings that might indicate incoming dump
Conservative LTV Strategy
Recommended approach:
- Max borrow: 30-35% of floor (not the platform max)
- Liquidation buffer: Floor must drop 40%+ before liquidation
- Have repayment ready: Always have ETH to repay or add collateral
Know Your Liquidation Math
Calculate exactly what floor price triggers liquidation:
Loan: 5 ETH at 50% LTV = 10 ETH floor minimum
Liquidation threshold: 75% LTV
Liquidation price: 5 ETH / 0.75 = 6.67 ETH floor
Buffer: 10 - 6.67 = 3.33 ETH (33% floor drop room)
Have an Exit Plan
Before borrowing, decide:
- What floor price triggers adding collateral?
- What floor price triggers repaying the loan?
- Can you afford to lose this NFT?
- How long will you hold this position?
Pro Tip: Treat NFT loans like margin trading—because that's what they are. Same risks, same need for stop-losses and position management. "Diamond hands" mentality kills in leveraged positions.
Advanced NFT Lending Strategies
Collection Diversification
Instead of borrowing heavily against one NFT, spread across collections:
- Borrow 25% LTV against BAYC
- Borrow 25% LTV against Azuki
- Borrow 25% LTV against Pudgy Penguins
If one collection dumps, you don't lose everything.
Rate Shopping
For the same collateral, rates vary significantly:
- Check Blur current rates
- Check BendDAO rates
- Get quotes on NFTfi
- Calculate total cost including any fees
Peer-to-peer (NFTfi) often beats pools for longer durations.
Rolling Loans
If your NFT appreciated:
- Take out larger loan (more collateral value)
- Use proceeds to repay original loan
- Keep the difference
Essentially extracting paper gains without selling. Risky if floor reverses.
Frequently Asked Questions
How does NFT lending work?
You deposit your NFT as collateral and borrow ETH or stablecoins against it. The loan amount depends on the NFT's floor price and the platform's LTV (loan-to-value) ratio. You pay interest on the loan. If you don't repay or the floor price drops too low, your NFT can be liquidated.
What is LTV in NFT lending?
Loan-to-Value (LTV) is the maximum you can borrow relative to your NFT's value. If your NFT is worth 10 ETH and the platform offers 50% LTV, you can borrow up to 5 ETH. Lower LTV = less borrowing but safer from liquidation. Higher LTV = more capital but higher risk.
What happens if my NFT gets liquidated?
If floor price drops and your loan becomes undercollateralized, the protocol seizes and sells your NFT to repay the debt. You lose your NFT permanently. Some protocols have grace periods or allow you to add collateral to prevent liquidation.
Which NFT lending platform is best?
Depends on your needs. Blur Lending offers instant loans with good rates for blue-chips. BendDAO is established with flash claim features. NFTfi allows peer-to-peer negotiation for custom terms. Compare rates, supported collections, and liquidation terms before choosing.
What NFTs can I use as collateral?
Mostly blue-chip collections: Bored Apes, CryptoPunks, Azuki, Pudgy Penguins, Doodles, etc. Each platform has a whitelist. Lower-tier collections may have worse LTV or no support at all. Floor price liquidity matters—platforms need to be able to sell if they liquidate.
What are typical interest rates for NFT loans?
Rates vary widely: 10-60% APR depending on collection, platform, and market conditions. Blue-chip collections with deep liquidity get better rates. Peer-to-peer platforms (NFTfi) can have lower rates if you find willing lenders. Always calculate total interest cost before borrowing.
Can I use NFT lending for leverage?
Yes, but it's risky. Borrow against NFT → buy more NFTs → borrow against those. This amplifies gains if floor rises but amplifies losses if it falls. Liquidation cascades can wipe out leveraged positions quickly. Not recommended for most users.
Is NFT lending safe?
It carries significant risks: smart contract bugs, oracle manipulation, liquidation from floor drops, platform insolvency, and the inherent volatility of NFT markets. Only borrow what you can afford to lose the collateral for, and monitor positions actively.