Bird, Ring Veterans Raise $5M for GameFi Lending Protocol
Web 3 is attracting Web 2 talent at a ferocious pace.
Add the founders of MetaLend, a lending protocol for non-fungible tokens (NFTs) that just raised $5 million in funding, to the list.
MetaLend co-founder Sudjeev Singh previously headed the growth and marketplace division for e-scooter company Bird. Co-founder Nikhil Bhardwaj oversaw a large engineering team at smart home security firm Ring.
“We are really excited about the direct impact we as builders will have on the space,” Bhardwaj told CoinDesk in an interview. “We’re at the forefront of it, and we’re really going to be able to influence what the future looks like.”
MetaLend’s new seed round was led by crypto investing giant Pantera Capital, which has $5.5 billion in assets under management. Participants in the round included crypto venture firm Collab+Currency and Vietnam-based gaming guild Ancient8, which is the first official guild partner of MetaLend.
The new capital will be used toward product development, hiring and marketing efforts.
“MetaLend allows NFTs to be utilized and leveraged in a new way that brings value to the entire play-to-earn ecosystem,” Pantera Capital partner Paul Veradittakit said in a press release. “As the use cases for NFTs grow, many will turn to protocols like MetaLend to access liquidity for their assets.”
MetaLend, which is currently in beta with a public launch planned for the second quarter, differs from some other NFT lenders in that players can keep playing and earning with the asset used as collateral.
The protocol had an initial focus on play-to-earn giant Axie Infinity but plans to integrate with a second, Polygon-based game within the next two to three months.
“If you think about it, what we’re doing is really beneficial to these games. You have a section of users who need liquidity and right now their only option is to sell out of their assets,” Singh told CoinDesk. “We provide that alternative, which is take on a loan instead and use the income from the NFT to pay that down over time.”
The MetaLend protocol lets users borrow up to 30% of the appraised value of an NFT in ETH. Overcollateralized loans are common in decentralized finance (DeFi) to help mitigate the risks of the underlying assets.
Read more: Framework Ventures Launches $400M Fund to Back Web 3 Gaming, DeFi
The loans appeal to individual players and gaming guilds looking to add liquidity to fuel their growth, said Singh. Ancient8 is the only official game guild partnership right now, but there are 10 to 15 other guilds sitting on the waitlist.
MetaLend loans don’t come from the protocol’s balance sheet, but rather originate from liquidity pools filled by outside lenders. The lenders earn interest on that money with MetaLend expecting about 5% to 10% APY.
If a borrower defaults on a loan, the NFT asset goes into a liquidation marketplace where people can buy the NFT at a discount. Game guilds are among the potential buyers, said Sin.
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