A creditor of now-bankrupted crypto exchange FTX pledged a claim as collateral for a loan in the decentralized finance (DeFi) protocol Arcade. The transaction was the first on-chain loan backed by an FTX claim, according to the bankruptcy claims platform Found.
The $31,307 claim was tokenized, and its ownership was represented by a nonfungible token (NFT). On June 23, the NFT was used as collateral for a $7,500 loan to be repaid in five days. In the event of a payment default, the lender is entitled to the claim.
✨Congrats wagmiclaims.eth for being the first onchain #RWA loan backed by a #FTX #bankruptcy claim
WAGMI is happy to have some spending cash for the @Azuki Vegas party this weekend
Special thanks to @Arcade_xyz for building a great platform pic.twitter.com/l8n8jGyKpp
— Found (@foundxyz) June 23, 2023
The transaction is an example of real-world assets (RWA) tokenization, in which a token represents an asset’s ownership rights on a blockchain. Within DeFi, asset tokenization is one of the most prominent areas, as a wide range of real-world assets can be tokenized, including stocks, government bonds, real estate and commodities.
On Twitter, Found said the original creditor and lender went through its biometric Know Your Customer and Anti-Money Laundering screenings. According to the company’s website, it allows users to access loans using bankruptcy claims as collaterals under a 10% transaction fee on successful trades.
Related: Mainstream media challenge decision to protect FTX customers: Report
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Author: Ana Paula Pereira
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