Arcade, a DeFi marketplace and lending platform, has finished its Series A investment round, raising a total of $15 million USD.
Arcade seeks to introduce liquidity to NFTs. To that end, Arcade is developing a DeFi lending platform that will employ NFTs as collateral. Gabe Frank, Arcade’s Co-Founder, explains:
The DeFi industry presently has over $200B in Total Locked Value, with NFTs accounting for a large percentage of that value; nevertheless, despite massive market caps, the absence of infrastructure in DeFi hinders NFT holders from reaching liquidity on their holdings.
The https://t.co/ERcIRTTCcW team is excited to announce our seed round fundraise, led by @Lemniscap, with participation from @arringtonXRPcap, and angel investors…https://t.co/beIITC5Z5S
— Arcade (@arcade_xyz) May 19, 2021
Previously, Arcade enabled the first $800,000 on-chain loan against an NFT portfolio. Pantera Capital, Castle Island Ventures, and the Franklin Templeton Blockchain Fund have all contributed to the lending platform’s 15 million USD in fundraising. Lauren Stephanian, Principal at Pantera Capital, shared her thoughts on Pantera Capital’s choice to invest in Arcade:
We are really thrilled about Arcade’s potential to usher in the next stage of NFT advancement. The collateralization of this new asset class by Arcade will encourage participation by new entities from both the traditional and digital art and finance worlds, such as institutional lenders, high-net-worth individuals, DAOs, companies with NFTs on their balance sheets, and NFT collectors and creators.
How does Arcade work?
Borrowers want to use one or more of their NFTs to collateralize a loan on Arcade mint a wrapped NFT. They can then freely choose the terms of the loan, such as the amount, interest rate, and length. Any lender who agrees to these terms is then free to accept the loan offer.
Borrowers must repay the loan amount plus interest before the loan matures. Lenders can claim all of the parts contained in the wrapped NFT in the event of a default.
The concept of what Arcade refers to as the Pawn Protocol, on the other hand, is not new. NFTfi was the first DeFi platform to provide this service in 2020. Earlier this year, NFTfi approved a 1.4 million USD loan with Autoglyph #488 as collateral.
