This week, an anonymous collector used their 101 CryptoPunks NFTs as collateral for a whopping $8 million loan. Surprisingly, this is the largest NFT-backed loan to date, confirming the NFTs’ growing real-life utility.
Collateral CryptoPunks NFTs are now possible
It’s a big day for liquidity scaling solution MetaStreet as the startup facilitated the largest NFT-backed loan ever recorded. Accordingly, a mysterious collector used 101 CryptoPunks NFTs with various rarities as collateral for an $8 million loan.
In fact, this loan is over three times bigger than the company’s previous largest loan of $1.42 million. Completed back in 2021, that loan was collateralized by an Autoglyph (a generative NFT powered by Larva Labs).
Thanks to the 101 CryptoPunks NFTs collateralized this year, MetaStreet beat its own record. Notably, this loan has a 30-day duration and a 10% APR. In order to complete the process, the startup joined forces with NFTfi, a peer-to-peer dedicated lending platform.
As for the collector, they have decided to stay anonymous. However, MetaStreet did confirm the borrower is a known NFT whale.
NFT-backed loans: a new trend?
As the NFT market evolves, so does the utility of digital assets. If NFT-backed loans seemed like a distant dream before, the 101 CryptoPunks NFTs used as collateral prove it’s all possible.
In fact, this is the core goal of MetaStreet, as CEO David Choi explained:
“I think [NFT] borrowing markets will just grow bigger and bigger, which means its purchasing power will increase. It’s like instead of putting all of your money into buying a house, you get a mortgage, which means you don’t have to pay that 90% until later. I think we’re extending the purchasing power of the entire industry,” he declared.