A new metaverse startup, Pawnfi, allows customers to borrow money against their NFTs. The company also provides appraisal and liquidation services. Venture capitalists are growingly financing startups that provide loan and lease services for digital goods.
Pawnfi, an alternative asset lender, recently secured $3 million in a fundraising round led by Digital Currency Group. The company employs a smart contract escrow mechanism to allow users to borrow money using their non-fungible tokens (NFTs). It also provides valuation and liquidation services.
In addition to NFTs, the business claims that their system is compatible with “liquidity provider tokens, tokenized entitlements, and small cryptocurrencies.”
Wesley Kayne, CEO of Pawnfi, said that the company’s most popular offerings include play-to-earn game rentals and loans against high-value NFTs like CryptoPunks.
“Web 3 gaming guilds”.
For this reason, Web 3 gaming guilds that provide play-to-earn loans of NFT assets in exchange for revenue sharing have grown in popularity. The structure lowers the barrier to entry for games like Axie Infinity. Which have a hefty upfront cost of several hundred to several thousand dollars.
Genopets, a GameFi “move-to-earn” videogame, recently partnered with Yield Guild Games. The move was to integrate a guild model directly into its game economy.
In October, Animoca Brands joined a $1.5 million round led by ReNFT, a firm that employs an escrow mechanism similar to Pawnfi. It aims to let NFT holders to monetize their digital assets by renting them.
According to Kayne, the guild model and other rentable NFT services are co-creators of a more accessible gaming ecosystem. Furthermore, “that will benefit all lenders, rather than competitors”.
Kayne sees Pawnfi, a “metaverse Airbnb,” giving housing loans in games like Decentraland and The Sandbox as the area evolves.
In an interview, Kayne said, “When you buy virtual land in a game like Decentraland, you’re really simply borrowing it from the game developer”. “Intuitively, the concept that players might desire to rent land from one another is the next stage.”
For MetaNews.