Connect with us

DeFi

Pioneering DeFi: A Bankrupted FTX Claim Tokenized for Collateral

Published

on

Spread the love

In the rapidly evolving world of decentralized finance (DeFi), a recent transaction marked a significant milestone. A creditor of the now-bankrupted cryptocurrency exchange FTX utilized a claim as collateral for a loan on the DeFi protocol, Arcade. This remarkable event marks the first on-chain loan underpinned by an FTX claim, according to the bankruptcy claims platform, Found.

The claim, valued at $31,307, was tokenized, with its ownership represented by a nonfungible token (NFT). On June 23rd, this NFT was deployed as collateral for a $7,500 loan, scheduled to be repaid within a five-day term. In case of a payment default, the lender has the right to claim the NFT.

This transaction serves as a showcase of real-world assets (RWA) tokenization, a process where a token encapsulates an asset’s ownership rights on a blockchain. Within the DeFi ecosystem, asset tokenization has emerged as one of the most significant segments, allowing a vast array of real-world assets, including stocks, government bonds, real estate, and commodities, to be tokenized.

Through a statement on Twitter, Found disclosed that both the original creditor and lender underwent its biometric Know Your Customer (KYC) and Anti-Money Laundering (AML) screenings. As stated on the company’s website, it enables users to access loans using bankruptcy claims as collateral, subject to a 10% transaction fee on successful trades.

The crypto exchange FTX declared bankruptcy in November 2022, consequently freezing billions of dollars in users’ accounts pending court proceedings. According to some estimates, holders of FTX claims may recover between 35% and 66% of their original value.

The last year has seen a surge in crypto-related bankruptcy cases, with many resulting from FTX’s collapse. Other notable cases include those associated with crypto firms Genesis Global Trading and BlockFi. This sudden increase in bankruptcy filings has spurred the development of on-chain claims solutions. Found, launched at the start of this year, is one such example. Similarly, the co-founders of the collapsed hedge fund, Three Arrows Capital, launched the claims trading platform Open Exchange in April.

As we observe the interplay of traditional financial constructs and innovative blockchain technologies, this use of a tokenized FTX claim as collateral illustrates the potential of DeFi to reshape financial transactions. The convergence of the real and digital economies continues to push boundaries, offering both challenges and opportunities in the ever-evolving world of digital finance.

Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. CoinReporter.io and EUReporter.co does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

Bitcoin

Interview with Valeriia Trubnikova from GO GREEN

Published

on

By

Spread the love
Continue Reading
Bitcoin3 months ago

Interview with Valeriia Trubnikova from GO GREEN

Bitcoin3 months ago

Interview with Mehmet Deniz Percin from Areon Network

Bitcoin3 months ago

Exploring the Future of Crypto with Mohamed Azzi from Sastanaqqam

Bitcoin3 months ago

Interview with Bill Wang from Bitunix

Bitcoin3 months ago

Zex PR Wire: Revolutionizing Media Announcements

Bitcoin3 months ago

Exploring the Future of Crypto, NFTs and Metaverse with Vibhor Khandelwal of Expand My Business

Bitcoin3 months ago

Sunmoney Solar Group Embraces the Future with Blockchain and AI at Dubai Event

Bitcoin3 months ago

MetaYobi: Pioneering the Next Era of Blockchain and NFTs

Bitcoin3 months ago

Foxify’s Evolution: A Deep Dive into Their Cryptocurrency Initiatives

Bitcoin3 months ago

A Deep Dive into Achainable’s Vision and Expertise | Insights from Dubai’s Tech Event

Bitcoin3 months ago

Blockchain Economy Summit Dubai, CoinReporter interview with CoinsDO

Bitcoin3 months ago

Interview with BRN Metaverse CTO Seyran Gorur

Bitcoin3 months ago

The Future of Crypto-Art: Sastanaqqam’s Journey. Interview with Mohamed Azzi

Bitcoin3 months ago

Exploring MetaYobi: Blockchain Solutions and Ambitious Plans. Interview with Mohammed Yousuf

Bitcoin3 months ago

Bitcoin’s Risk-Reward Ratio -Very high quality interview from Kitco News with Fred Krueger

Bitcoin9 months ago

Bitcoin’s Rhythmic Movements: Deciphering the Leading Digital Currency in the Midst of Economic Shifts

Crypto9 months ago

Shifting Tides: India’s Journey Towards Universal Digital Currency Regulatory Measures

Featured9 months ago

Panerai’s Digital Transformation: The Advent of the NFT Digital ID

Crypto9 months ago

Crypto and the SEC: Navigating New Waters

DeFi9 months ago

Polygon Labs asks senators to consider apple orchard as they tax crypto

DeFi9 months ago

Coinbase Cloud integrates Kiln platform for native ETH staking below 32 ETH

DeFi9 months ago

Squid unveils direct swaps across Cosmos and EVM blockchains

DeFi10 months ago

DeFi Value Locked Reaches $42 Billion – A Comprehensive Analysis of the Latest Trends in Decentralized Finance

Featured10 months ago

A Conversation with BRN Metaverse: An Insight into Their Ecosystem, NFTs, and AI Integration

Bitcoin11 months ago

Interview with Berkan from Crypto Carbon Energy

Advertisement

Trending