In a first for Africa (and possibly worldwide), Lamna now offers asset-based loans against the value of a non-fungible token (NFT).

What is a non-fungible token?

A non-fungible token is a unit of data stored on a digital ledger known as a blockchain. In this way, they’re similar to bitcoin except cryptocurrencies aren’t non-fungible.

Non-fungible means unique or can’t be replaced, so an NFT has to be one-of-a-kind. NFTs can be anything digital, including art, music, videos and even Tweets.

Loans against non-fungible tokens

NFTs can have immense value, making them a type of asset or investment. This means you can use them as collateral against an asset-based loan.

Using NFTs to get a loan is now possible with Lamna. To qualify, you’ll need to verify the unique identity and ownership of your NFT. The loan amount will be based on the value of your NFT.

Co-founder of Lamna, Charles Meyerowitz, says, “With the rapid growth of cryptocurrencies, we understand that our clients’ buying power has increased. This includes investing in digital asset classes.”

“We understand that the modern client isn’t limited to investing in traditional assets, such as physical works of art, motor vehicles or jewellery. So, to be a relevant asset-backed lender in the 21st century, we are leading the charge in the world to cater to investors who need to unlock the liquidity of their assets.”

How non-fungible tokens work

NFTs are essentially collectables except they only exist in the digital realm.

Much like physical collectables, their value is largely determined by however much someone is willing to pay for them. As an example, Twitter founder Jack Dorsey sold his first-ever Tweet as an NFT for almost US$3 million.

It might seem weird that something like a Tweet or an image could be an NFT considering anyone can see or have a copy.

But think of it in terms of the Mona Lisa. There are many copies of that famous artwork. However, only one true original would be considered non-fungible (and can be assigned the appropriate value).

The difference between NFTs and cryptocurrencies

Cryptocurrencies are like digital money. For example, one Bitcoin can be replaced with another Bitcoin because there’s nothing to distinguish them from each other.

NFTs have to be unique and irreplaceable. This is what gives them their value. Copies can be made of something digital that is or becomes an NFT, but the original will always be unique.

Non-fungible token examples

Non-fungible tokens are a relatively new type of asset, but we’ve already seen some fascinating and valuable digital assets being sold as NFTs in the last couple of years.

Non-fungible tokens and digital art

One of the most famous examples of digital art being sold as an NFT was a collage of 5,000 digital pieces created by an artist known as Beeple.

The collection was auctioned by Christie’s in March 2021 for a whopping US$69 million.

Another good example is the sale of Nyan Cat as an NFT. Nyan Cat is a well-known but quite old GIF of a pop-tart cat riding a rainbow.

Despite being viewed and saved as a GIF by countless people for more than 10 years, a one-of-a-kind edition of the Nyan Cat GIF still sold for US$580,000.

Other examples of NFT sales

By definition, anything digital can be created as or turned into an NFT. All you need is someone willing to buy it. That means that even this blog could be turned into an NFT and sold to the highest bidder.

Other examples of NFTs include:

• digital artworks
• GIFs
• social media posts
• videos
• avatars or video game skins
• music
• photographs
• essays
• domain names
• digital coupons or tickets.

Asset-based loans with Lamna

We are the first financial services provider in Africa to offer loans based on NFTs. We also offer asset-based loans against the value of other assets, from vehicles to luxury watches, jewellery, artwork and more.

For more information about using an asset to secure a short-term loan, contact us on 086 111 2866 or simply complete and submit our online application form.