What Are Nft-Backed Loans? A Case Study With Sharky

Kairon Labs
3 min readApr 24, 2024


NFT lending is a relatively new concept in the world of digital assets, and it’s already becoming a popular model among NFT holders — digital assets as collateral for financial transactions. However, it’s been a challenge historically as market volatility and collateral valuation pose risks for borrowers. What emerged as a solution to this is peer-to-peer NFT lending.

Sharky, one of the recently launched projects in Solana, is said to offer a solution to this concept. They offer NFT-backed loans, with a promise to enhance lending competitiveness and safeguard against excessive risk, but how exactly?


Peer-to-peer NFT lending facilitates direct crypto lending and borrowing with unique NFTs as collateral. This model runs on the idea that NFTs have unique traits and are indivisible, which means their value is taken as a whole. This would require lenders to independently appraise the collateral value when issuing the loan.

This lending model is known to be less efficient than automated lending platforms, so we’re curious to know how Sharky steps up to the plate.

Speaking of NFTs, we did delve into this topic in our recent SPACES which you can listen to here:

Impact of Bitcoin Halving to Altcoins, NFTs, and DeFi


One of the recently talked-about projects that dives deep into the NFT lending space is Sharky. Kairon Labs recently partnered with the Sharky team to learn more about NFT lending and give a better understanding to our readers of the benefits and possible risks associated with this concept.

Sharky is a lending protocol on Solana with a peer-to-peer loan order book model facilitating the borrowing and lending of non-fungible tokens or NFTs. They promise to serve two specific purposes:

  1. Provide instant liquidity for NFT holders
  2. Gain high % APY yields

In a sense, borrowers can receive a loan from Sharky, provided that they allow their NFTs to be locked for a certain period until that loan is paid back with interest. This is a way to collateralize your NFTs and gain instant liquidity, instead of your liquidity being locked up in your NFT and not being able to use it as a way to generate more profit in the interim.

Their NFT lending protocol features a live open order book that allows you to be informed while you lend assets. This means that lenders can compete with their offers in the order book and be competitive about loan terms based on LTV, loan duration, and APY.


Sharky offers this: “NFT crypto liquidity made easy”, especially if you have a wealth of NFT locked in your wallet. Sharky also provides competitive turnaround times and APYs for lenders. Additionally, lenders have the opportunity to earn NFTs along with interest, potentially increasing the value of their investment. This occurs in the event of a borrower defaulting on the loan.


Sharky’s proposition entails that you can surrender your NFT as collateral for a reasonable loan. Take note — “surrendering” in this context does not mean completely losing access to your asset. You’re simply locking it up in your wallet until you repay your loan. This means you get to keep voting, receive airdrops and access to events, and stay in your DAO. You only lose your NFT to the lender if you don’t repay your loan by the due date.

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Learn more about Sharky Fi on their official platforms:

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