This platform provides loan features with NFT guarantees and luxury watches

Liputan6.com, Jakarta Blockchain technology has changed the way people interact a lot. But some innovators hope to push the boundaries of this technology even further.

Reporting from Decrypt, Wednesday (12/7/2023), the latest innovation trend today is that blockchain can turn the world into one giant pawn shop. Arcade.xyz, a DeFi protocol for NFT loans, has started facilitating loans between foreigners who use luxury watches as collateral, and use NFTs to guarantee the terms of those loans.

In recent weeks, Arcade users have loaned three Rolexes to anonymous lenders for cash. Enabling the trading of high value physical assets for cash between online addresses is a chain of custody involving third parties and NFTs.

Borrowers submit their watch to 4K, an on-chain escrow protocol, and receive an NFT representing watch ownership in return. The borrower then lists the NFT in the Arcade, waiting for the best loan offer.

After borrowers and lenders are matched in Arcade, the NFT representing the watch is sent to an escrow wallet. The only way to get the watch back from 4K is to burn the NFT at the end of the loan duration.

It will be returned to the borrower after the loan is repaid, or handed over to the lender if the borrower disappears.

Remarkably, the entire loan process can be carried out without either party knowing the identity of the other party a benefit which according to Arcade’s leadership can greatly increase the global pool of potential borrowers and lenders looking to utilize physical items.

Disclaimer: Every investment decision is in the hands of the reader. Study and analyze before buying and selling Crypto. Liputan6.com is not responsible for profits and losses arising from investment decisions.