Lending against game assets carries significant risks. Volatility: Digital assets like NFTs or in-game items can fluctuate wildly in value, potentially leaving lenders underwater if prices crash. Liquidity: Many game assets lack robust secondary markets, making it hard to sell collateral quickly. Security: Smart contracts or platforms hosting assets may be vulnerable to hacks, risking total loss. Legal Uncertainty: Unclear regulations around digital ownership can complicate enforcement of loan agreements. Depreciation: Game popularity fades, reducing asset value over time. Counterparty Risk: Borrowers may default, and recovering virtual collateral can be challenging. Lenders must carefully assess asset stability, platform reliability, and legal frameworks before engaging in such high-risk ventures.