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Patek Philippe Watch Used As Collateral In A $35,000 DeFi Loan

Press Releases Crypto News Bitcoinist Patek Philippe Watch Used As Collateral In A $35,000 DeFi Loan

On July 10, a lender extended a $35,000 loan to an individual using a Patek Philippe watch as collateral via Arcade, a decentralized lending platform, with the watch being verified and held in escrow by the 4K Protocol. Patek Philippe watches are considered some of the most valuable watches in the world, with some fetching millions of dollars at auctions.

Patek Philippe Watch As Collateral

The borrower engaged an escrow company to securely store the watch, which subsequently issued a unique non-fungible token (NFT) representing the ownership of the timepiece. This NFT was listed on the Arcade platform, where interested lenders could submit their loan offers. After reviewing the listed options, the borrower took a $35,000 loan from one of the listed offers.

To ensure the security of the transaction, the NFT representing the watch ownership was transferred to an escrow wallet. The NFT will be held in the wallet until the loan is fully repaid to secure the lender’s interest.

On the other hand, if there is a default, the lender will claim the Patek Philippe watch by burning the associated NFT. This mechanism ensures that the lender becomes the lawful owner of the collateralized watch.

As transaction data reveals, the involvement of an escrow firm, smart contracts, and NFT has simplified the lending process. Most importantly, the identities of the borrower, who owns the coveted watch, and the lender remain private. The trustless nature of crypto transactions means transactors don’t have to reveal their identities if they transfer value via non-custodial wallets like MetaMask.

Falling Floor Prices In NFT

Even though the involvement of NFTs in DeFi loans has opened up liquidity, allowing users to tap into global liquidity that can be supplied at any time of the day, there are cautions.

For instance, while the nota

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Author: Dalmas Ngetich

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