“That’s why lenders want to have some room between the price of the asset and how much they lend,” Young said on the dynamics in pricing between lenders and borrowers on NTFfi. “This is because in the case where somebody defaults, they need to be able to sell it for less than market value, and the price might have dropped in between. So that’s why they need such a big buffer between the loan value and the value of the actual asset.”

https://techcrunch.com/2021/11/16/south-africas-nftfi-raises-5m-so-people-can-use-their-nfts-as-collateral-for-loans/