Arcade raises $15M in funding round for launching NFT-collateralized loan

Arcade raises $15M in funding round for launching NFT-collateralized loan

Arcade, a platform that enables its users to use nonfungible tokens (NFTs) as loan collateral, has announced having raised $15 million in a Series A funding round. 

In the December 22 announcement, Arcade disclosed that it partnered with Pantera and other investors for connecting NFT-collateralized lending with the decentralized finance space. 

Others in the funding round included Castle Island Ventures, Golden Tree Asset Management, Franklin Templeton Blockchain Fund, Protofund, Eniac Ventures, Lemniscap and Probably Nothing Capital. Among the angel investors were the CEO of Quantstamp, Richard Ma and BlockFi CEO, Zac Prince.

Following the funding, Arcade is coming out of a private release with $3.3 million in total loan volume, securing on a total of $10 million in assets.

Arcade’s Co-founder, Gabe Frank, has said that NFTs account for a significant portion of the fast growing DeFi market, which is currently worth more than $250 billion in terms of total value locked. But “the lack of infrastructure in DeFi” has prevented NFT holders from achieving liquidity on their holdings despite huge market caps, he said. 

The LinkedIn page of Arcade shows at least 10 US.-based employees, with ongoing hiring for various roles like lead talent specialist, senior software engineer, and team coordinator. 

Principal at Pantera Capital, Lauren Stephanian, has said that the platform’s collateralization of NFTs has had the potential for incentivizing participation from “high-net-worth individuals”, “companies with NFTs on their balance sheets” besides NFT collectors, institutional lenders, and DAOs.

Other platforms have already released the facilitation of the loan against NFTs or are within the timeline of launching it soon. These include ETNA Network and Lithuania-based lending platform Drops. 

In March, Teller Finance, the lending protocol had announced that some of its users could obtain credit without posting collateral, accessible through special NFTs.