NFT loans go wrong after scammers get involved
After failing to repay an 11.5 ETH loan, a Mutant Ape NFT holder lost their NFT. Loans are becoming more common in the NFT world, and people use their NFTs as collateral for large amounts of money. However, like real life loans, it is risky and often does not work out in favor of the borrower. In this example, the person lost a very valuable NFT. But, this is not an easy case. In fact, the previous MAYC holder claimed that they were hacked. Because of this, they were unable to repay the loan, resulting in MAYC NFT losses.
Is an NFT loan worth the risk?
NFT loans are a substantial risk for both parties, and people should be cautious when considering them. The legal protections that usually come with regulated loans are not the same and there are many gray areas. However, many use them successfully.
@CirrusNFT first tweeted about the loan, saying, “No one paid off their 11.5e debt on this mutant this morning. It was foreclosed and sold for 22e within an hour. Borrow responsibly, my friends.”
Statistics show that a floor price value of MAYC NFT is around 14 ETH. The NFT in question, Mutant Ape #10269 sold for 22 ETH This means that the person who initiated the NFT loan lost 10.5 ETH.
Lenders speak!
The person behind the loan also commented on the situation in response to the tweet. Known as Borrower @gmpotatodogsaid “I was a lender – agree with the sentiment of being cautious, but the context is a little different here! The borrower was hacked and unable to pay. We communicated a while ago. He has been sent money over and above the debt so that he can recover something.”
To clarify, a foreclosure means that the borrower cannot repay the loan. The borrower also claims that they sent ETH above the amount to help the person.
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This article is educational material.
As always, do your own research before making any type of investment.
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