New NFT project collects 8 million dollars in the middle of the washout in crypto tokens

Astaria, a decentralized finance project (DeFi) founded by ConsenSys and SushiSwap alum Joseph DeLong, has raised $ 8 million in a round that included True Ventures, Arrington Capital, Wintermute and many others.

The platform will allow holders of valuable non-fungible tokens to unlock them as collateral and lend crypto against them so that holders can then buy other NFTs, plus trade and invest in decentralized finance. For borrowers, liquidity is immediate and settlements more predictable.

• Astaria should launch in Q3, according to the project. It does demos at NFT.NYC on June 22nd.

Driver news: In the midst of a brutal downturn in everything crypto-related, much of the air has been released from the NFT market. But Astaria’s fundraising success suggests that the obituary for the sector may have been written too early.

There is still a lot of wealth trapped in non-fungible tokens. The volume is considerably down in the NFT market, but it is definitely not gone, DeLongs co-founder Justin Bram told Axios.

• Lending to NFTs allows holders to access that wealth and get it started. But there is still a lot of unrest in the industry.
• Right now, at least one large hedge fund, Three Arrows Capital, is called margin, and it is likely to sell many extremely valuable NFTs eventually.
• Still, “with our system, they do not have to default,” Bram said. In theory, they could access parts of the value of these NFTs with loans instead.

Normal people can be useful too. “Many of these monkey-keeping people are NFT-rich and low-money, and we want to fix that,” said DeLong, referring to the Bored Monkeys Yacht Club, the most valuable single collection of NFTs in the world right now.

Situational understanding: Decentralized finance and NFTs have been dancing around each other since at least 2020. Astaria is not the only company entering the NFT lending area, but it believes it can promote the product significantly for users.

• “We believe this will add rocket fuel to the NFT industry,” said DeLong.
• Previous participants include NFTfi, JPEG’d and Metalend.

Astaria uses an rating system where a knowledge worker writes a term sheet about an NFT that reflects its special properties. The appraiser decides how much can be lent against NFT, the length of the loan and the interest rate, and can even create some special terms.

• If investors like term sheets, they can outsource assets to borrowers. If borrowers like it, they can accept the loan.

• Loans that provide will drive income to appraisers, so they have an incentive to write terms the market will like.

Astaria has also created special features so that borrowers can still “use” their NFTs if something special comes up (like accessing a party or unlocking a gift for holders).

Be smart: Price discovery in NFTs is very difficult. Not all Bored Apes are the same (not even close), for example.

• As DeLong explained, if you have 100 of some NFT and someone buys one of them for a million dollars, it definitely does not mean that you have a collection of $ 100 million.

Reality check: There is a complete bear market in crypto, and future growth looks difficult at best. So it may seem like a crazy time to build a company around lending to JPEGs.

• But the Astaria team looks 3-5 years ahead of the next generation of NFTs that do much more than early versions.
• “We are very focused on the long game,” said Bram.