What Is the Primary Risk for the Lender in a Peer-to-Peer NFT Loan?
The primary risk for the lender is the illiquidity of the NFT collateral. If the borrower defaults, the lender takes ownership of the NFT, but its unique nature means it may be difficult and time-consuming to sell quickly at the appraised value.
The lender risks being stuck with an illiquid asset that is worth less than the outstanding loan amount.
