FTX’s bankruptcy claim has been tokenized by one of its creditors. This makes it possible to utilize it as security for a $7,500 loan via the DeFi service, Arcade.
It’s the first on-chain loan supported by an FTX claim.
Source: Pixabay
An original use of NFTs in the NFT realm is the tokenization of bankruptcy claims. The NFT acts as security and guarantees repayment of loans by demonstrating ownership. Real world asset tokenization, additionally referred to as the tokenization of multiple real-world assets, is a method that is gaining popularity in DeFi.
Also, creditors can access funds by utilizing their claims as security via NFTs and blockchain technology. As a result, the financial sector becomes simpler and more liberated. Wider use of DeFi services is encouraged by tokenizing traditional assets and legal claims. For both people and organizations, this provides more capital possibilities.
Unexpectedly, one of the FTX exchange‘s creditors tokenized their $31,307 bankruptcy claim. As a result, this NFT now serves as security for a $7,500 loan made through the DeFi service Arcade, making it the first on-chain loan supported by an FTX claim. Mentioned in the tweet.
A $31,307 claim from FTX was tokenized as an NFT and used as collateral for a $7,500 DeFi loan on Arcade.
https://t.co/TA7cDLagGf
— Cointelegraph (@Cointelegraph) June 25, 2023An major development in Web3 technology and conventional financial systems was the tokenization of bankruptcy claims into NFTs. This strategy demonstrates the potential of tokenization and the part DeFi plays in releasing capital and accelerating monetary transactions.
The foreseeable future of financial institutions will likely be shaped by the rapidly expanding sectors of Web3, DeFi, and NFTs, which will alter ownership of assets, transfer, and utilization in a variety of methods.
