In brief

  • Loans that use high-value NFTs as collateral are gaining traction.
  • An owner of 104 CryptoPunks NFTs took out a $8.3 million loan on the lot.

Auction house Sotheby’s was slated to offer up a lot of 104 high-value CryptoPunks NFTs in February, with an estimated haul of $20 million to $30 million for the set. Instead, the owner of the Ethereum NFTs withdrew the lot minutes before the auction’s start—and gloated about “rugging” Sotheby’s on Twitter.

Instead, 0x650d—the pseudonymous owner of those NFTs—has now taken out an $8.3 million dollar loan using the set of CryptoPunks as collateral, the largest such loan reported to date.

The April 1 loan tops one backed by a separate bundle of 101 CryptoPunks from a different holder, who secured $8 million in early March. Both loans were executed through NFTfi, an NFT-backed loan marketplace, with a liquidity-providing DAO (or decentralized autonomous organization) called MetaStreet offering up the funds on both occasions.

“Thanks to the chads [at MetaStreet] for unlocking 8.32m in liquidity on my CryptoPunks while allowing me to retain upside exposure to my collection,” 0x650d tweeted. Decrypt reached out to 0x650d for additional info on the loan and the earlier decision to cancel the Sotheby’s auction, but didn’t receive a response.

The loan sees 0x650d borrow 8.32 million DAI stablecoin with a 90-day repayment window and a 10% APR, according to details provided by NFTfi. It’s the largest example yet of the growing trend of NFT collectors tapping their valuable holdings to unlock short-term…

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