A revolutionary lending platform based on polygons will utilize blockchain technology to address the liquidity challenges faced by owners of luxury collectible items when they want to convert their assets into cash.
Davide Rovelli, an advisor to Altr, an asset-backed lending platform, explained to Cointelegraph that collectors of luxury items encounter various obstacles when trying to convert their assets into cash. Selling to dealers often leads to lower offers, as dealers need to make a profit when reselling the items. Opting for auctions can result in better prices, but it requires extensive preparation and involves paying third-party fees.
Altr uses luxury items as collateral for blockchain-based loans. Source: Altr
Rovelli believes that blockchain can provide a solution to these challenges for collectors. He suggests that collectors can digitize their collectibles, create a digital ownership certificate within the blockchain, and utilize these digitized assets as collateral to quickly obtain on-chain loans. Rovelli elaborated:
The tokenization of real-world assets (RWAs) has been a popular topic of conversation in the crypto space. When asked about the significance of tokenization, Rovelli emphasized that it adds an “extra layer of transparency in a sector where transparency has never been a strong point.”
In addition, he explained that users can bring their assets onto the blockchain after they have been certified, valued, and stored. This not only provides enhanced security but also enables almost instant liquidity, as users can utilize the digital tokens representing their assets as collateral for blockchain-based loans. Rovelli believes that this approach unlocks the economic value of luxury items and represents a shift in leveraging luxury assets in the digital era.
Rovelli also argued that Web3, which prioritizes transparency and security, aligns well with the needs of the luxury industry. This is because Web3 offers a way to “verify the authenticity of high-end products” and track their history. According to Rovelli, a Web3-based system could make it “nearly impossible” to counterfeit luxury goods.
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Polygon-based lending platform offers liquidity for luxury goods using cryptocurrencies.