Gmoney’s Motivation
Gmoney is the founder and CEO of a fashion brand called 9dcc.
He borrowed $1 million against his rare digital artwork called CryptoPunk #8219, an NFT (Non-Fungible Token).
His goal is to challenge the idea that NFTs (digital assets) are worthless, especially after some media reports suggested their decline.
Background on Gmoney
Gmoney is known for taking big risks on valuable assets in the crypto world.
His CryptoPunk #8219 is one of the rarest in a collection of 10,000 NFTs, and its starting price is almost $140,000 worth of Ethereum on secondary markets.
Loan Details
Gmoney secured the $1 million loan using a decentralized NFT lending protocol called Gondi.
The loan amount was in USDC stablecoin with a 14% interest rate for a 180-day period.
This is the largest loan made through an NFT lending platform to date.
Purpose of the Loan
Gmoney aims to show that NFTs have value by using one as collateral for a loan.
He wants to challenge the belief that NFTs are not valuable assets.
The move also highlights the potential of using NFTs as collateral for loans.
NFT Lending Platforms
Gmoney is an investor in Gondi, the platform he used, and also in a rival platform called Arcade.
These lending platforms allow anyone with a valuable NFT to take out a loan without needing special connections or a real-world identity.
They operate on a trustless basis, emphasizing the decentralized nature of blockchain technology.
Market Impact
Gmoney believes introducing credit into the NFT space through loans could lead to significant developments.
He suggests that the addition of credit mechanisms could amplify the appreciation of NFTs seen in previous cycles.
Interest Payment
Gmoney has to pay a 14% interest rate on the $1 million loan.
This amounts to over $69,000 in interest for each six months.
Broader Implications
Gmoney’s move highlights the changing role of NFTs, showing they can be more than just collectibles.
The rise of NFT-backed loans is seen as something that could bring more growth and innovation to the NFT space.