Will Teller’s Buy Now Pay Later Service for NFTs Follow Klarna’s Plunging Valuation?

DeFi lending platform, Teller, has launched a Buy Now Pay Later feature for NFTs.
Image source: Teller

Quick take:

  • Teller’s new Ape Now, Pay Later service is only available for 10 blue-chip NFT projects at launch.
  • The service runs on Polygon.
  • Users are required to pay a minimum downpayment to purchase an NFT. 

Decentralised lending protocol, Teller, has launched a new “Ape Now, Pay Later” service allowing people to buy a blue-chip NFT first, and pay later, according to a report by Decrypt.

The feature is similar to the Buy Now, Pay Later (BNPL) business model offered by Affirm and Klarna, which has been adopted by major retailers. However, there are some key differences between the services provided by these fintech companies and the one by Teller.

Teller’s Ape Now, Pay Later service runs on Polygon and is currently only available for 10 blue-chip NFT projects. Liquidity on the platform is provided by potential lenders. For instance, if a user wants to purchase a Bored Ape Yacht Club NFT on a marketplace such as OpenSea, they can use Teller’s platform to purchase that NFT. 

The user is then required to pay a minimum downpayment, and the platform will match the buyer/borrower to a lender to fulfil the remainder of the payment. If the match is successful and the lender accepts the repayment terms, the downpayment is combined with the funds from the lender to make the purchase of the NFT.

The NFT is placed in an escrow wallet during the repayment cycle and if the loan is repaid on time, the NFT will be released from escrow to the borrower.

According to Decrypt, Teller’s Ape Now, Pay Later service enables prospective buyers to access costly NFTs by paying over time. 

At launch, Ape Now, Pay Later supports NFTs such as Mutant Ape Yacht Club, Moonbirds, Doodles, Cool Cats, Azuki, Meebits, Adidas Originals: Into the Metaverse, RTFKT-MNLTH, and Murakami.Flowers Seed.

The Adidas NFTs require a the lowest downpayment of just 25% of the cost in ETH while RTFKT-MNLTH and Murakami are at 33% each. The rest of the blue-chip collections require a minimum downpayment of 50%.

Berkun told Decrypt that the rates were based on market liquidity and volatility.

“Buying NFTs is one of the core things Web3 consumers want to do right now,” Ryan Berkun, founder and CEO at Teller Finance, told Decrypt. “Buy now, pay later is a no-brainer.”

While the BNPL business model may attract Web3 consumers, it’s not doing too well for Web2 fintech company, Klarna. The Swedish company was valued at $45.6 billion in June after closing a $639 million funding round, but on Jul 1, the company was reportedly raising another $650 million at a $4.5 billion valuation.

Klarna CEO and founder Sebastian Siemiatkowski attributed the plunging valuation and layoffs to different macro and geopolitical factors such as a shift in consumer sentiment, the Ukraine war, inflation, a volatile stock market and possible recession.

The Web3 space has also been affected by the same chain of events that affected Klarna, as the prices of cryptocurrencies and total NFT transaction volume have also plummeted in recent months, but Berkun remains optimistic about Ape Now, Pay Later. How the new service will perform remains to be seen.

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