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The Non-fungible token (NFT) market has been on the rise in the past few months as more people become familiar with the metaverse concept. This burgeoning crypto niche is getting interest from popular figures across multiple industries, including entertainment, sports and the creative sector.
So, what’s in it for the common folk? For starters, it is crucial to understand that NFTs are indistinguishable in nature which means that each token is unique. As such, NFTs have become the tools and means to the metaverse (virtual world) and are being used to represent artwork, digital collectibles and in-game items on blockchain ecosystems.
That said, the biggest NFT adoption driver has been play-to-earn games such as Axie Infinity and Decentraland. The former has been hitting record volumes, with the total transaction volume standing at over $2.7 billion as of press time. Some families in Thailand and the Philippines have been playing Axie Infinity to support their families.
Can this model be borrowed to repay mortgage loans? Well, not many stakeholders from the NFT and real estate market have explored this option. However, the opportunities theoretically show that NFT gaming or investing could be an excellent way to settle traditional debt. This is because of the lucrative returns and the underlying potential of a metaverse future.
Settling Mortgage Debt Through NFTs
While the concept may seem far fetched, the whole point comes down to meeting one’s mortgage payment obligations. Currently, the average interest rate on mortgages in the U.S ranges between 2.5% and 3.25%, depending on the repayment period. This is a bit of a stretch for homeowners, given that bank savings only offer a meagre 0.6% APR on average while money market returns are at 0.9%.
