MetaStreet, a liquidity routing and scaling solution for the NFT collateralisation platform, has announced it has secured US$3 million in seed financing and an additional US$11 million in initial protocol liquidity to jumpstart the expansion of the quickly developed collateralised NFT lending market.
In what has been billed the largest-ever NFT-backed loan, an anonymous borrower took out a US$8 million loan collateralised by their collection of 101 CryptoPunks. The loan, with an APR (annual percentage rate) of 10 percent and a 30-day duration, was facilitated by liquidity scaling solution MetaStreet on peer-to-peer lending platform NFTfi:
Nexo, Three Arrows Set Precedent
This is not the first time NFTs have been used as collateral. In December, world-leading crypto lending specialist Nexo teamed up with Singaporean hedge fund Three Arrows Capital to launch its new NFT-backed lending service. It meant that clients were from that point able to borrow digital assets and use NFTs as collateral.
This round of financing is seen by participants in the crypto world as a bellwether for lending secured by digital collectibles, as the market continues to boom at an astronomical pace. Conor Moore, co-founder and CEO of MetaStreet, has said the loan is “orders [of] magnitude larger” than any previous NFT financing. Moore did not disclose the identity of the borrower but referred to “him” as a whale – a person who holds vast amounts of crypto.
MetaStreet has only eight full-time employees but has secured US$3 million in seed financing and an additional US$11 million in initial protocols liquidity so far this year. The firm provides a layer of financial infrastructure to NFTs, specifically lending protocols such as NFTfi and Arcade.
David Choi, Moore’s fellow co-founder and CEO of MetaStreet, has said NFT collectors want to free up capital more efficiently and don’t want their crypto assets to accumulate virtual dust:
By having an active borrowing and lending market [in NFTs], you create productive assets that are otherwise viewed as unproductive.
David Choi, co-founder and CEO, MetaStreet
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