As per the report, an anonymous borrower got an $8 million loan from liquidity scaling solution MetaStreet by lending 101 CryptoPunk NFTs, this is claimed to be the biggest NFT-backed loan.
Cryptopunk is one of the oldest and leading collections in the NFT space, which is a collection of 10,000 computer-generated pixelated images curated by Larva Labs.
The loan has been borrowed on 10% APR (Annual Percentage Rate) for 30 days. The transaction settlement was completed on a peer-to-peer lending platform NFTfi.
Many intellectuals affirm this settlement as a big milestone in the future of lending secured by digital collectibles – a market with exponential growth in the NFT and crypto space.
Co-founder and Chief operating officer of Metastreet, Conor Moore stated in an interview that the current loan settlement is “orders of magnitude larger” than the last NFT loan settlement.
Before this, Metastreet executed another record-breaking loan settlement of $1.42 million collateralized by an Autoglyph. However, Moore refused to disclose the identity of the borrower.
“It’s sort of like how Fannie Mae works in the US housing market. You’ve got a big aggregation vehicle through which originators can sell loans that then get batched up and split into different tranches,” Moore said. “Those different tranches allow for more optimal capital efficiency.”
“I think [NFT] borrowing markets will just grow bigger and bigger, which means its purchasing power will increase,” Choi said. “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. [With MetaStreet], I think we’re extending the purchasing power of the entire industry.”
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