NFTs Are Worthless? Why Gmoney Took Out a $1 Million Loan on His CryptoPunk

Mainstream media reports might tell you that NFTs are dead, but the holder of a CryptoPunks NFT said he wanted to prove them wrong—by taking out a seven-figure loan on one of the rarest assets in the prominent profile picture (PFP) collection.

“Here we are, four or five months removed from an article in Rolling Stone saying that NFTs are worthless,” collector and entrepreneur Gmoney said today on Rug Radio’s live “FOMO Hour” show. “And so I was like, ‘Well, what better way to show that these are not worthless if I can get a million-dollar loan against an NFT, right?”

Gmoney, the pseudonymous founder and CEO of connected fashion brand 9dcc, is known in the crypto world as someone who has made sizable bets on high-value assets. And he’s amassed a sizable following in the process, making his PFP even more recognizable.

His CryptoPunk #8219 is one of just 24 Apes in the entire 10,000 NFT collection, and others have sold for as much as $10 million in the past. CryptoPunks start at a price of nearly $140,000 worth of Ethereum on secondary marketplaces as of this writing, but sale prices for rare assets in the collection can still deliver a sizable multiple of that.

He secured the loan on Gondi, one of several NFT lending protocols that match NFT owners with liquidity providers in a decentralized fashion. Holders can take out loans with the NFT itself provided as collateral, and the counterparty floating the cash is taking a bet that they’ll earn some interest on the transaction—or maybe take the NFT itself if the loan defaults.

This particular loan was for $1 million worth of USDC stablecoin with a 14% interest rate, but for a 180-day period—meaning he’s set to pay out over $69,000 in interest for each six months.

It’s been hailed as the largest loan per date via an NFT lending platform.

Gmoney said that he’s an investor in Gondi, along with rival NFT lender Arcade—but lending platforms like this don’t require any special connection, reputation, or proof of real-world identity. Any owner of a valuable NFT can potentially take out a loan in a trustless fashion.

And he’s bullish on what the rise of NFT-backed loans can do to propel the space even further.

“When you think about the asset appreciation we had last cycle—that was without credit, right?” he said. “What happens when you introduce credit into the system? You start to see some pretty crazy stuff happen.”

Edited by Ryan Ozawa.