Cryptocurrency investor GMoney recently made headlines by securing the world’s largest on-chain non-fungible token (NFT) loan for a single CryptoPunk, amounting to $1 million.
The transaction unfolded on Gondi, a peer-to-peer NFT lending protocol designed to connect NFT owners with liquidity providers. GMoney leveraged the platform to initiate a six-month loan against one of his valuable NFT holdings — CryptoPunk #8219.
The entire process was executed through code and smart contracts on the Ethereum blockchain, showcasing the autonomous nature of such transactions.
The mechanics of the loan are straightforward: the NFT collateral, once placed in an escrow contract, can only be reclaimed by GMoney upon full repayment of the loan, including a 14% interest rate, amounting to $70,000 over the loan’s duration.
While the purpose of the loan remains undisclosed, GMoney hinted on the Rug Radio show, a prominent daily discussion on Web3, that the capital would serve as “a bridge between transactions.”
GMoney has gained recognition within the crypto and NFT community for his consistent investments and holdings. Notably, in 2021, he borrowed $25,000 against a CryptoKitty and participated in collaborations with Adidas, the Bored Ape Yacht Club NFT project, and Punks Comic.
The concept of NFT lending has garnered considerable attention in the NFT space, leading projects to develop tailored solutions. For instance, Blur, the leading NFT marketplace, has developed its lending protocol called “Blend,” which accommodates various collateral types, including NFTs.
NFT lending offers a new avenue for both lenders and borrowers in the digital asset space. Lenders can earn passive income by temporarily lending out their NFTs, maximizing the utility of their assets. On the borrower’s side, NFT lending provides access to coveted digital assets without requiring outright ownership, facilitating participation in various digital ecosystems without significant upfront costs.
