Recently, a collector also bought a fake Banksy NFT for a whopping £244,000.
Even though the collector,Pranksy, had his digital currency returned after what seemed to be a scam.
It’s worth noting that you have to be extremely careful when shopping around for these unique digital collectibles.
Many people appear to be getting excited and aggressively purchasing these so-called NFTs without giving it much thought.
Before making any impulsive purchases, you need to ask yourself a few simple questions.
For example, is what you are acquiring really worth it?
It might seem trivial to determine whether an item is really worth the price, but in the heat of the moment, our judgment can be quite off.
Do You Really Know or Understand What You’re Buying?
Potential buyers also need to truly understand what an NFT actually is. An NFT or non-fungible token is simply an item that cannot be traded like other assets.
That’s because each of these NFTs is meant to be unique. Being a one-of-a-kind item makes them valuable, but that’s not always the case.
After paying a large for an NFT with hopes of selling it for higher price might not always work out. So finding that eager buyer who would gladly pay even more for the digital collectible can become quite difficult.
However, there are some projects out there that can make it a lot easier for sellers to find buyers.
It’s well-known that the art and collectible markets are a lot more “liquidity-starved” compared to the traditional equity, gold markets, and other assets.
And this issue is a lot more evident in the NFT space, which is in its initial stages of growth and development. It could take a really long time to match prospective buyers with appropriate sellers or lenders and borrowers.
Without enough liquidity, NFT owners might end up selling their collectibles for a lot less than the price they paid for them.
Getting the Best Price for Your Valuable NFTs
A new project known as Drops allows NFT holders to acquire funds by putting their NFTs up as collateral.
Lenders can benefit from a chance to make sizable profits without worrying about repayments because the loan is backed by an NFT that either equals or exceeds the total loan amount.
Drops.co has been specifically developed to provide loans for NFT and DeFi-focused assets.
The initiative aims to offer people with legitimate options that allow them to effectively leverage their assets for loans. They may also engage in yield farming.
With Drops, users are able to borrow against DeFi and NFT-type assets. It’s also possible to lower the opportunity cost of holding governance or liquidity tokens by putting them up as collateral to earn more yield.
Through Drops, you are also able to use NFTs as collateral to acquire trustless loans. Lending through Drops is powered by public NFT lending pools.
Good APY’s canbe made with their “idle” or parked assets. It can be done by providing stablecoins or governance tokens to either fungible or NFT lending pools.
More Utility for Your NFTs
There’s a lot more utility for NFTs with Drops as the platform offers “DeFi-style infrastructure” to NFTs. This increases the utility of idle NFT assets.
Users may leverage their NFTs to get easy loans and generate yield, while also lowering the opportunity cost of holding NFTs on a long-term basis.
The Drops infrastructure might become systemically important as we start seeing the rise of ‘financial’ NFTs – which is a natural expansion of the space beyond simple digital artwork into more “tangible” financial instruments.
NFT lending pools on Drops can be useful for many different types of users.
Anyone has the ability to establish an NFT Lending Pool by specifying accepted NFTs and amounts that may be borrowed against them.
Users who might be seeking yield can provide liquidity through Drops to NFT lending pools and starting backing assets they are confident about.
Collectors can supply NFT with stablecoins and then get matched up with the most competitive rates.
Nothing Beats Common Sense
While platforms like Drops provide many ways for market participants to get the best deals for NFTs, you still need to do your own research. NFTs are just like any other financial market where you need to exercise caution and make well-informed decisions. It’s also a good idea to remind yourself that you should always invest only as much as you are willing or can afford to lose.