- Founder of Aave announced a new feature of using Loot NFT as collateral to borrow AGLD.
- Aave protocol would be the first to use a collateral in the form of an NFT.
- Loot NFT is unique because anyone can build anything on it.
Stani Kulechov, founder of AAVE, today announced in a tweet that Aave protocol would soon introduce a new feature to use Loot NFT as collateral to borrow AGLD. By doing this, Aave would become the first protocol to use an NFT as collateral.
The Loot NFT project includes a random word generator. All statistics, pictures, and other NFT functionalities are purposefully excluded in this project for others to interpret. Users can use the loot NFTs however they like.
Aave is a decentralised finance (DeFi) protocol that allows people to lend and borrow cryptocurrencies without going via a middleman. Solely, NFTs can be used in lending, specifically collateralized lending. Collateralized lending allows borrowers to borrow money using digital assets as collateral.
This isn’t the first time Aave has encountered NFTs. They previously worked with Axie Infinity, an Ethereum-based game, to develop an Aave NFT for the game. Aave also invested in Pixelcraft Studios for the development of ‘Aavegotchi’. It allows players to collect Tamagotchi-inspired NFTs powered by the Aave protocol.
Kulechov didn’t give any details on this feature, though from his tweet he indicated that he’s writing a smart contract that can execute this feature. further updates are yet to come.