A pseudonymous NFT entrepreneur known as Gmoney borrowed $1 million as a 180-day loan in tokenized U.S. dollars (USDC) using his prized Ape Punk #8219 as collateral on the Gondi lending platform.
This is the first time a high-value single asset has been used to secure such a loan, according to the investor. The loan “not just a testament to the value of Ape Punk #8219 but also underscores the growing value and influence of NFTs in the financial and art sectors.”
Ape Punk #8219 us part of the CryptoPunk NFT collection.
“The loan is for a personal transaction," Gmoney told Benzinga. "Yes, we're making a major point about the value of the NFT. I could have pursued more traditional routes to secure cheaper financing, but the fact that I was able to obtain a loan without any additional requirements is remarkable. The beautiful aspect is the ability to refinance the loan without any delays in closing."
According to a late 2023 report from CoinGecko, NFTs, or non-fungible tokens, lost more than half of their volume between 2022 and 2023 - dropping to $11.6 billion from $26.3 billion.
Benzinga also asked Gmoney if, given the demonstrated volatility, NFTs were a realistic form of collateral for a secured loan, which is typically based on very stable assets.
“Look at the CryptoPunks floor; it has been very stable over the last few months and years. Lenders definitely wouldn't take on default risk of that size unless they felt confident about the loan. In my opinion, CryptoPunks are the highest tier of NFT collateral you can find,” Gmoney said.
CryptoPunks NFT Floor price is currently around 58.5 Ethereum ETH, worth about $156,000.
Gmoney remains optimistic about the trajectory of NFTs in 2024, saying he believes most strongly in the underlying technology.
“I'm bullish on the technology. I'm bullish on the new use cases that will emerge from it. I'm bullish on credit entering the system. The last cycle happened with virtually no credit markets," he added.
As we can see from this loan, the market is beginning to open up. If you want to have an idea of what this means for NFTs, you needn't look any further than what happened to the US housing market when the mortgage market started in the 1930s.”
Gmoney is co-founder of 9dcc, a web3 fashion house founded in 2023. The startup recently revealed a collection of Near-Field Code (NFC) chip-enabled products that will be unveiled between Feb. 23-24 at NFT Paris. 9dcc is expanding its collection of fashion and luxury objects from a catalog of 4,500 items to over 20,000 products.
The blockchain-linked NFC chips used in 9dcc objects enable communication between electronic devices – allowing these items to unlock digital opportunities and experiences for holders. According to 9dcc, bonus experiences include the chance to play exclusive games and the ability to create and collect personalized Proof-of-Attendance Protocols (POAPs) as a way to commemorate special events.
Cover image source: 9dcc
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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