Record-Breaking $1 Million Dollar NFT Loan

NFT MARKET_WATCH

Gondi, a peer-to-peer NFT lending protocol, announced that it has facilitated a record-breaking loan of $1 million USDC against CryptoPunk #8219. The loan is for a period of 6 months, and the borrower is NFT entrepreneur and icon GMoney. The loan is the largest ever on-chain loan against a single CryptoPunk.

The NFT-backed loan marks a historical feat for the NFT market and particularly for CryptoPunks and lending protocols such as Gondi. A loan of this size signals great conviction on the lender side as well as trust on the borrower side. The NFT lending market has reached a total of $135 million dollars in outstanding debt. GMoney has not disclosed what he will be using the capital for but mentioned on Rug Radio show that he will be using the capital as "a bridge between transactions." GMoney famously borrowed $25,000 against a CryptoKitty back in 2021 and has been involved with NFT lending space as a user and investor since then.

The loan required no paperwork, no SSN, and no in-person meetings. The loan was all coordinated via code and smart contracts on Ethereum's mainnet, on a peer to peer basis. The NFT was moved to an escrow contract from where it can only be retrieved if the borrower repays the loan in full including interest before its due date. Gondi's escrow contract currently holds about $25 million dollars worth of collateral used against $13.4 million dollars of current outstanding debt. [3] Loans originated at Gondi are able to be refinanced at any point in time (after a lockup period of 5% of the remaining duration once started or refinanced) creating a competitive on-chain market for credit. NFT Lending is not limited to digital only art or collectible but also, real world assets that are represented by NFTs on the blockchain. RWA can range from luxury watches to apparel like 9dcc's NFTs that represent the apparel the brand produces.

Source : Yahoo Finance / Feb 8, 2024

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