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London Tech Week

Lending platform Arcade raises $15M to offer loans collateralised by NFTs


Traders and entrepreneurs have recently taken a few steps to squeeze more investment opportunities out of their JPEGs as part of the continuous race to transform everything into a non-fungible token (NFT).

Take, for example, the practice of taking out a loan and using an NFT as collateral. Now, Arcade, a platform that allows customers to use NFTs as lending collateral has secured Series A round worth $15M to introduce collateralised lending, which ties NFTs to decentralised finance (DeFi), to the market.

The funding round saw participation from Pantera Capital, Castle Island Ventures, Franklin Templeton Blockchain Fund, Golden Tree Asset Management, Eniac Ventures, Protofund, Probably Nothing Capital, and Lemniscap. Angel investors include CEO of BlockFi Zac Prince and CEO of Quantstamp Richard Ma.

The platform is also coming out of a private release, with a total loan volume of $3.3M secured on $10M in assets.

Fund Utilisation

Arcade plans to use the additional funds to develop new products and hire new people, notably in the legal department, to assist the company better grasp NFT rules.

“The DeFi industry currently has over $200 billion in total locked value, with NFTs accounting for a significant portion of that value; however, despite massive marketcaps, the lack of infrastructure in DeFi prevents NFT holders from achieving liquidity on their holdings,” explained Gabe Frank, Arcade’s Co-Founder.

For institutions, decentralised autonomous organisations (DAOs), and collectors, Arcade appraises, validates, and curates NFT collections. “All ERC-20 tokens, including wETH, USDC, and DAI, are fully compatible with the company.”

Tech at play

Wrapped NFT technology from Arcade allows NFTs to be packed together to secure a single loan. The company is also an open-source DeFi primitive, which means that developers can build on top of it.

“We are very thrilled to close our Series A from significant investors, who, like us, appreciate the opportunity and potential for financializing NFTs and enabling NFT holders to unleash the value of these digital assets,” said Robert Masiello, Co-Founder of Arcade.

Meanwhile, the year 2021 was when the NFT became a household name and another acronym on everyone’s lips. This year, Sotheby’s and Christie’s sold NFTs worth $65 million and $100 million, respectively, as auction houses sought to expand their presence in the sector by striking arrangements with purchasers via social media and obtaining NFTs from the artists who developed and executed them.

Arcade has at least ten workers based in the United States, and the company is presently searching for a senior software engineer, a lead personnel expert, and a team coordinator.

Pantera Capital Principal Lauren Stephanian said, “We’re really enthused about Arcade’s ability to usher in the next chapter of NFT growth. Institutional lenders, high-net-worth people, DAOs, firms holding NFTs on their balance sheets, and NFT collectors and developers will all benefit from Arcade’s collateralization of this new asset class.”

Other platforms, such as ETNA Network and Lithuania-based lending platform Drops, have also established or are in the process of introducing services to facilitate loans against NFTs. Teller Finance, a lending protocol, revealed in March that certain of its users would be able to get credit without putting up any collateral, thanks to special NFTs.

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