In its attempt to bridge the gap between the traditional art market and new digital asset classes, lending start-up NFT Arcade announced on Wednesday it had raised $ 15 million in Series A funding to develop its platform. fungible token financialization, or NFT.
Funding came from eight investment firms, including Pantera Capital, Castle Island Ventures and Franklin Templeton Blockchain Fund, as well as angel investors Zac Prince, CEO of BlockFi and Richard Ma, CEO of Quantstamp. Proceeds from the $ 15 million financing will be used to build the Arcade platform.
Formed in 2020, Arcade is an NFT loan marketplace that independently assesses, validates and manages NFT collections and enables owners of high value NFTs to use them as collateral for loans. Robert Masiello, co-founder of Arcade, said in an interview with ZDNet that the platform caters to both borrowers and lenders. “If you own high value NFTs, you can borrow on fair value. We support about 45-50 different NFTs collections, so this is for NFTs that have some value against them,” he said. -he declares.
On the other hand, Arcade allows people to become lenders, allowing those who wish to lend capital to those who seek to borrow against their assets. These transactions go on a smart contract platform on the Ethereum blockchain, fully compatible with all ERC20 tokens, including wETH, USDC, and DAI. “We are a non-custodial platform,” Masiello said. “We don’t have access to anyone’s assets or money exchanged. We take a service fee to provide this smart contract system, but it’s basically a non-custodial escrow platform on Ethereum. . ”
Over the past few months, Arcade has achieved approximately $ 3.5 million in “private publication” lending volume, but plans to open it to the public in January. Masiello noted that Arcade was only open to NFT collectors and multi-million dollar institutional lenders, but also to Decentralized Autonomous Organizations (DAOs) – a type of venture capital fund based on open source code without management structure or board of directors. . “We had a mix of different constituents and people using the platform on the lending side, and on the borrower side it was mostly high-value NFT collectors who don’t want to sell their assets, but rather want to sell their assets. put them to good use, ”Masiello said. “They take the proceeds from those loans and reinvest them in NFTs, decentralized finance, and other forms of crypto and financial products without having to sell their assets.”
A unique feature of Arcade is its use of Wrapped NFT technology. This proprietary technology allows multiple NFT assets to be bundled and used to acquire a single loan, enabling the acquisition of larger loans and greater liquidity. According to the company’s press release, Arcade will also allow developers to build on the platform, supporting wider use of new digital asset classes.
NFTs are perhaps one of the most misunderstood digital assets to emerge in the blockchain arena, as many struggle to define what they are. Simply put, these are unique units of metadata and identifying codes that exist on a blockchain, like Ethereum, and cannot be replicated, like fiat currency or bitcoin. They usually come in the form of digital files such as photos, videos, computer-generated illustrations, and sound clips. These files can be “tokenized” so that they can be bought, sold or exchanged in complete safety and, therefore, can be valued monetarily. In other words; many NFTs are the digital equivalent of a priceless work of art. Think of DaVinci’s Mona Lisa. Although the Mona Lisa can be reproduced in various formats, there is only one true Mona Lisa.
But NFTs are more than just digital works of art. They can take the form of digital products, from luxury branded clothing and collectibles to real estate and online games. Masiello notes that Arcade supports any NFT, whether it’s digital collectibles or in-game avatars. “I think the universe of what an NFT will be over the years. The next five years will continue to expand and unfold. Anything can be an NFT or have some kind of NFT associated with it, but the angle of art is very relevant to people as they understand that art can be bought and sold and that it has this provenance associated with it. We allow a financial utility that has existed for art before, but now this universe for us of what could be borrowed and lent is so much greater than just the art. This is for the whole of the symbolic standard for the NFT, ”he said.
Arcade’s $ 15 million fundings may be a small initial step, but with the help of its financiers who see the potential expansion of the NFT market, it could be poised to take a giant leap in a digital economy without limits. “We will continue to hire and strengthen the team,” Masiello said, noting that he and his team of 13 will continue to create products, complement the team and strengthen marketing efforts. “We believe Arcade will act as a portal to this financialization of the concept of NFT, which will effectively take other types of products beyond this simple peer-to-peer lending platform. We are trying to make our platform -Also similar and innovative as a leading crypto companies, but with a focus on NFTs, ”he said.