Despite mainstream media reports suggesting the demise of NFTs, a CryptoPunks collector, identified as Gmoney, has taken a bold step to prove their value. Speaking on Rug Radio’s live “FOMO Hour” show, Gmoney, the pseudonymous founder and CEO of connected fashion brand 9dcc, shared his decision to secure a seven-figure loan using one of the rarest assets from the prominent CryptoPunks profile picture (PFP) collection.
In response to skepticism about the worth of NFTs, Gmoney expressed his desire to challenge the narrative, stating, “What better way to show that these are not worthless if I can get a million-dollar loan against an NFT, right?” Known for making significant bets on high-value assets, Gmoney has gained recognition in the crypto community, further enhancing the visibility of his PFP.
His chosen CryptoPunk, #8219, is one of only 24 Apes in the 10,000-strong NFT collection, with previous sales reaching as high as $10 million. CryptoPunks typically start at nearly $140,000 worth of Ethereum on secondary markets, and rare assets in the collection can command much higher prices.
To facilitate this unconventional financial move, Gmoney utilized Gondi, one of several NFT lending protocols connecting NFT owners with liquidity providers in a decentralized manner. The loan structure involves using the NFT itself as collateral, and the lending party is essentially betting on earning interest or acquiring the NFT in the event of default.
The specifics of Gmoney’s loan include $1 million in USDC stablecoin with a 14% interest rate for a 180-day period, translating to over $69,000 in interest every six months. This transaction has been hailed as the largest loan to date via an NFT lending platform.
Gmoney disclosed his involvement as an investor in both Gondi and rival NFT lender Arcade. However, he emphasized that lending platforms of this nature do not necessitate any specific connections, established reputation, or proof of real-world identity. Any NFT owner holding a valuable asset has the potential to secure a loan in a trustless manner.
Expressing optimism, Gmoney anticipates the positive impact that the emergence of NFT-backed loans can have on advancing the space. Reflecting on the previous cycle’s asset appreciation without the influence of credit, he remarked, “What happens when you introduce credit into the system? You start to see some pretty crazy stuff happen.”