Astaria, an NFT lending platform unlocking instant liquidity, announced on Tuesday that it has raised $8 million in a seed round from major venture capital and angel investors.
Astaria disclosed it intends to use the funding round to expand its current eight-person team.
Venture investors include True Ventures, Arrington Capital, Ethereal Ventures, Wintermute, Genesis Trading, LedgerPrime, Hypersphere Ventures and several notable DAOs like The LAO.
Other notable angels and advisors, such as Anthony Sassano, and Sam Kazemian, among others, also participated in the funding round.
Accessing instant, highly liquid NFT lending in DeFi has challenged the current NFT lending platforms. Astaria platform, which is set to be launched in September, aims to solve such problems by allowing users to place their NFTs as collateral to earn instant liquidity.
The recent plunge in NFT sales, which signals a bear market, makes Astaria’s services much more attractive to NFT owners seeking to earn passive income on their digital assets.
Users who place their NFTs as collateral can use the Astaria platform to get loans in Ether (ETH). Joseph Delong, Astaria co-founder and CTO, said that Astaria plans to integrate multiple chains beyond Ethereum to support loans in other crypto coins.
Joseph Delong is a crypto veteran who previously led decentralized finance protocol Sushi and worked at ConsenSys.
The market for NFT lending services has witnessed massive growth in the previous year. While firms like NFTfi and Arcade offer peer-to-peer lending services, they often require two-sided approvals and lack efficiency.
Astaria platform is designed as a step-order improvement on the existing NFT lending platforms. Astaria’s approach is different as it does not mandate two-way approvals to make transactions more efficient.
Users can log in to the Astaria web platform, and access customized liquidity in terms of their unique non-fungible tokens without forced liquidations.
NFTs As Collateral Loans
The latest development by Astaria signals DeFi platforms lending cryptocurrencies and accepting NFTs as loan collaterals as one of the latest trends in the blockchain niche. Many NFT lending platforms currently allow users to lend their NFTs as collateral to borrow cryptocurrencies.
DeFi platforms provide NFT loans by allowing NFT owners to mortgage their NFT pieces in exchange for cryptos or fiat currency. Many NFTs on the market are highly illiquid, and several DeFi projects have recognized the rising need to improve NFT liquidity using solutions like lending.
That is the latest proof that NFTs are growing in use for everything from fantasy sports and social clubs to complex financial instruments. Larger financial institutions such as Prime crypto brokerage Genesis Trading and crypto exchange Nexo accept NFTs as loan collateral.
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