In Largest NFT-Backed Loan, 101 CryptoPunks Were Pledged as Collateral

  • The loan was completed by liquidity scaling startup NFT MetaStreet on the NFTfi lending platform
  • “By having an active borrowing and lending market [in NFTs]you create productive assets that are otherwise considered unproductive,” Conor Moore, co-founder of MetaStreet, told Blockworks.

In what has been touted as NFT’s largest secured loan, an anonymous borrower has just taken out an $8 million loan secured by his collection of 101 CryptoPunks.

The loan has an APR of 10% and a term of 30 days. It was facilitated by the MetaStreet liquidity scaling solution on the NFTfi peer-to-peer lending platform.

The funding is seen by industry players as an indicator of the future of loans secured by digital collectibles – a market that is expected to grow as institutional interest in the sector continues to grow.

Conor Moore, co-founder and COO of MetaStreet, told Blockworks that the loan is “an order of magnitude larger” than previous NFT (non-fungible token) funding. MetaStreet helped secure the previous record-breaking loan last year – a $1.42 million loan secured by an autoglyph.

Moore did not reveal the identity of the borrower, whom he referred to as a “whale,” or someone who holds large amounts of cryptocurrency.

MetaStreet, which has eight full-time employees, secured $3 million in seed funding and $11 million in initial cash from the protocol earlier this year. The company provides a layer of financial infrastructure to NFTs, specifically lending protocols such as NFTfi and Arcade.

“It’s kind of like how Fannie Mae works in the US real estate market. You have a big aggregation vehicle through which originators can sell loans which are then matched and split into different tranches,” Moore said. “These different tranches allow for more optimal capital efficiency.”

NFT collectors MetaStreet co-founder and CEO David Choi said they want to free up capital more efficiently and don’t want their crypto-assets to accumulate “virtual dust”.

“I think [NFT] the borrowing markets will get bigger and bigger, which means its purchasing power will increase,” Choi said. “It’s like instead of putting all your money into buying a house, you get a mortgage, which means you don’t have to pay that 90% until later. [With MetaStreet]I think we are extending the purchasing power of the whole industry.

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  • Morgan Chittum

    Morgan Chittum is a New York-based journalist covering NFTs, Metaverse, Game-to-Win, and other emerging Web3 technologies for Blockworks. Previously, she was a street reporter, covering crime at the New York Daily News, and a press and journalism officer at the Poynter Institute. Contact Morgan by email at [email protected]

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