Skip to main content
Learn

How Are NFTs Used to Collateralize Loans in DeFi?

NFTs are locked as collateral for borrowing fungible crypto; if defaulted, the platform liquidates the unique NFT asset.
Greeks.Live16.11.25

How Are NFTs Used to Collateralize Loans in DeFi?

NFT lending platforms allow users to lock their non-fungible tokens as collateral to borrow fungible cryptocurrencies (like ETH or stablecoins). The loan is typically structured as an overcollateralized peer-to-peer or pool-based loan.

If the borrower defaults, the platform liquidates the NFT to cover the debt. Valuing the unique NFT collateral is the main challenge.

What Is the Difference between Fungible and Non-Fungible Tokens (NFTs)?
What Is a Fungible Token versus a Non-Fungible Token (NFT)?
How Can an NFT Be Used as Collateral in DeFi Lending?
How Does Fractional Ownership of NFTs Impact Their Use as Collateral in DeFi Lending?

About

Contact

Editorial Policy

Terms of Service

Privacy Policy

Cookie Policy

© 2025 Greeks.Live

All Rights Reserved

Greeks.Live RFQ

Build by Noo on Engine

Source: The content on this website is produced by Greeks.live's proprietary analysis systems, which utilize advanced Large Language Models (LLMs). This information might not be subject to a full human review before publication and may contain errors.
Responsibility: You should not make any financial decisions based solely on the content presented here. We strongly urge you to conduct your own rigorous due diligence and to consult a qualified, independent financial advisor.
Purpose: All information is intended for informational purposes only. It should not be construed as financial, investment, trading, or any other form of professional advice. News and data are not trading signals.
Risk: The cryptocurrency, derivatives, and options markets are highly volatile and carry significant risk. By using this site, you acknowledge these risks and agree that Greeks.live and its affiliates are not responsible for any financial losses you may incur.