First Loan Issued With Ethereum Domain Name (Brantly.eth)

Rocket LP DAO is a 4-month old loan provider which is the cryptocurrency news today for using non-fungible tokens (NFTs) as collateral. As we can see this week, this firm issued the first loan of $1,000 backed by only one Ethereum domain name – brantly.eth.

The loan was issued for 90 days with a 15% interest rate and is the first loan to ever be issued with only an Ethereum name service domain name for collateral.

Rocket signs off the first ever domain name backed loan ⌨️🚀

– @ensdomains x @RocketNFT Loan
– $1,000 of ETH loaned to @BrantlyMillegan
– “Brantly.eth” is the collateral, also the loanee first name
– 15% interests due
– Duration: 3 months

Read more:https://t.co/74W1s3XVux

— Rocket (@RocketNFT) April 15, 2020

As we can also see in the ETH news, ownership of the ENS domain name (represented as an NFT) has been temporarily given to Rocket as the issuer of the loan. NFTs are ERC-721 tokens which are created to digitally represent a physical or digital asset. The most prevalent use case revolves around tokenizing ownership of valuable assets and can be transferred to another user using a smart contract.

Meanwhile, the 90-day loan is worth 6.5 ETH ($1,000 at the time of the issue) and was given to ENS director of operations Brantly Millegan on Tuesday. Even though he retains the ability to use the domain name during the term of the loan, Rocket has authority over it. If the loan defaults, Rocket will retain ownership of the domain name and has the right to remove Millegan’s access to it entirely.

A domain name, however, may be purchased for very little. However, Millegan explained in a Medium post that “Brantly is my first name and this particular ENS name has great personal value to me so I have a strong incentive to repay the loan.” This is why the loan was the first loan issued with an Ethereum based domain name.

All of this definitely raises the question of whether we can accurately value or tokenize sentiment. Even though the transaction is recorded on the blockchain, there are users who suggest that the valuation was too high or it has little correlation to an NFT. “Might be worth 1/10th of that on the market,” one user commented.

The crypto community continues to push the boundaries set in place by the traditional financial systems along with various P2P lending opportunities among other new approaches. In the market turmoil recently, MakerDAO was one of the coins in the altcoin news which caused a stir as it struggled to handle the wild fluctuations – and is now facing a $28 million lawsuit.