In the crypto space, there is no shortage of creativity regarding how an NFT is used. In this video clip from "The Crypto Show" on Motley Fool Live, recorded on March 23, contributors Travis Hoium, Jon Quast, and Chris MacDonald outline several interesting ways that NFTs could function as collateral in certain financial transactions. 

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Travis Hoium: Yeah. This site they talk about renting, lending, and mortgaging NFTs. If you think about it, if an NFT is an asset of value, then I should be able to borrow against that in some way. This is, I think, one of the first places that you can go to do this. There have been some larger assets that have been bundled together to provide collateral. I think it's interesting that it's called no collateral lending because you do, I believe have collateral, but it's a different kind of collateral than a home, it's a digital asset.

This could be a really interesting concept, long-term, as people have more and more digital assets. If I have, say a million dollars in NFTs, but I don't own a home, maybe I can use my NFTs to borrow against or mortgage to buy a home. At least another interesting financing option coming out of the crypto space, so we'll see where this one goes long-term.

Jon Quast: This will be like a cash-out ReFi? [laughs] You own the thing now you're putting a mortgage on it?

Hoium: Yeah, basically. Or taking out some margin on your brokerage account. If you have a bunch of gains but you don't want to sell all of your stocks, you take out a margin loan and use those funds elsewhere.

Chris MacDonald: This seems like there's some real utility that could be had in the digital real estate. The metaverse space too.

Hoium: We just had a question about livestock. If all of your livestock is on the blockchain and it represents a real live piece of livestock and you're borrowing against that, and me as a lender, I know some information based on that blockchain asset, that could be an interesting use case. I think this is another case of the industry starting to mature and figure out, what are the real utilities that we can have here? I think we're going to see more and more of this.

Quast: Travis, I don't know how much you dove into the nitty-gritty here, I'm just curious. I buy a house on a 30-year mortgage. It's an amortization schedule over 30 years. What I'm paying in principal and interest, it's already determined upfront when I take out that mortgage. I don't know if this is the same. Over what periods can I mortgage an NFT?

Hoium: It is up to the person that is putting this asset up for rent or mortgage. One I think potentially interesting use case for this is there are starting to be cases where an NFT gives you access to something. Like the Bored Ape Club did a big event last year. Well, to get access to that you had to have an NFT.

What if I can't go, but one of you guys wants to go and rent my NFT for a few hundred bucks or whatever it is for the day to go to this event? I think that is something that we're starting to see, so maybe this could be a centralized location for that. But from everything I've seen, the terms are laid out in advance and it's, at least on a smaller scale, take it or leave it.