Friday, June 21, 2024

JPEGs of Mega Mutant MAYC NFTs used as Collateral for $1.3 million Loan via Arcade.

It’s awesome to see loans getting funded in this market climate, says Gabe Frank – the CEO of Arcade, after Fragment, the holder of a pair of Mutant Ape Yacht Club (MAYC) NFTs, borrowed 1,000 ETH, which is around $1.3 million, using its JPEGs as collateral. This loan was facilitated by NFT lending company Arcade.

Frank highlighted that prices have stabilized some and volatility has dropped. He explained that lenders are more willing to underwrite larger loans because of the improving environment. Frank described the rare mutants (NFTs) as “incredibly rare assets”.

Arcade has given a non-recourse loan. This means the lender can seize the loan collateral in the case of a default. Frank revealed that the lenders on the other end of Fragment’s Mutant Ape loan are Nexo and Meta4 NFT Lending – the loan repayment terms are 1,044 ETH in 90 days at an 18% APY. If the borrower defaults, Arcade has an on-chain claim to the collateral in the protocol. Frank said the company can claim the assets, unwrap them and sell them if it has to, or keep it on the balance sheets.

Fragment founder PTM said it’s building IPs around mega mutants and is looking to have more Megas participate in their universe. He outlined that the idea was to get some cash fast to take advantage of an opportunity. PTM said lending was the right call for what it needed. He said they plan to unwind the loan in the next 90 days or so.

Arcade has noted a steady increase in NFT borrowing since June 2022. There was a high $2.5 million in September – most activities were seen in buying and selling NFTs with $11.1 million in September.

Cryptured Team
Cryptured Team
The writers team at Cryptured.com is composed of passionate and experienced journalists who cover the latest developments in the crypto and blockchain space. They aim to provide accurate, unbiased and easy-to-understand news and information for their readers, as well as insights and analysis from industry experts. The writers team is always on the lookout for new and exciting stories that can help the general public learn more about the potential and challenges of these technologies.
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