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Animoca Brands to support decentralised finance

Animoca Brands to support decentralized finance through blockchain-based student loan innovation

https://icn.live/wp-content/uploads/2025/05/animoca-studnet-loanas.mp3
  • by ICN.live
Khaled Darwish

Animoca Brands to support decentralized finance is a major step in reshaping how student loans are delivered.

In collaboration with Open Campus, Animoca Brands has provided US$10 million in liquidity for blockchain-based student loans. These funds are being deployed via Pencil Finance, a decentralized finance protocol designed to make student loans transparent, efficient, and globally accessible.

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The loans are issued on the EDU Chain, a new Layer 3 blockchain tailored for education finance. The EDU Chain connects trusted student loan providers with global investors, using tokenised bundles of loans that are visible and traceable on-chain.

This initiative comes at a time when US student loan repayments are under increasing pressure. Government-led changes to repayment schedules and forgiveness terms have raised concerns of mass defaults. With decentralized finance, students may find new pathways to secure loans with clear terms and automated repayment systems.

Blockchain reshapes student loans for the digital era

Pencil Finance allows liquidity providers to participate in senior or junior loan tranches. This means contributors can choose risk levels while earning yield. All transactions and repayments are transparently managed on the blockchain.

This model offers a compelling alternative to traditional loan systems. It enhances financial literacy and opens student lending to a broader, borderless pool of capital. As Yat Siu, executive chair of Animoca Brands, stated, the aim is to “boost Web3 adoption for hundreds of millions of students.”

EDU Chain, which powers the loans, is supported by the EDU token. It is listed on exchanges like Binance, reinforcing its position within the broader crypto ecosystem.

ANOTHER MUST-READ ON ICN.LIVE:

ICN.live Key Opinion | EXCLUSIVE Interview with Yat Siu, Co-founder of Animoca Brands

Animoca Brands to support decentralized finance in the Middle East

Alongside its investment in Pencil Finance, Animoca Brands has launched its first Middle East office. Located in Dubai, the office will explore Web3 innovation across the region. Omar Elassar has been appointed to lead this effort as the regional managing director and global head of strategic partnerships.

Dubai offers Animoca a strong base in a fast-growing, tech-driven region. The company plans to use this hub to grow its partner ecosystem, tap into new investment opportunities, and drive regional blockchain adoption.

Group president Evan Auyang noted that Omar’s leadership will be central to Animoca’s growth goals. He brings significant experience in Web3 and strategic partnerships.

Blockchain finance meets real-world needs

Animoca Brands to support for decentralized finance is not just about technology. It’s about meeting urgent financial needs with innovative tools. As millions of US students face the burden of repayment under new federal rules, solutions like Pencil Finance offer a practical alternative.

Frank Li, co-founder of Pencil Finance, emphasised that blockchain allows lending to be reimagined entirely. Through global access and full transparency, this model brings hope to underserved students worldwide.

The shift to on-chain loans could eventually scale to tackle a US$3 trillion market. With increased access to funding and clearer repayment systems, students globally can pursue their education with more confidence.

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What is Pencil Finance and how does it work?

Pencil Finance is a decentralised lending protocol designed to bring student loans on-chain. Built on the EDU Chain, the platform enables verified loan providers to create tokenised bundles of student loans. Global investors can contribute liquidity into loan pools by selecting either a senior tranche (lower risk, lower returns) or a junior tranche (higher risk, higher returns). The use of blockchain ensures transparency, seamless repayment tracking, and automated smart contracts that reduce overhead and increase access to capital for students around the world.

Why is Animoca Brands investing in decentralised student loans?

Animoca Brands is a Web3 leader with a mission to foster blockchain adoption in real-world sectors like education. The student loan market, worth over US$3 trillion globally, faces massive challenges including lack of transparency and restricted access. By supporting Pencil Finance with US$10 million in liquidity, Animoca aims to modernise this sector through decentralised finance. This approach also promotes financial literacy, expands access to education, and strengthens its ecosystem with a practical use of blockchain.

What is the EDU Chain and how does it power these loans?

The EDU Chain is a Layer 3 blockchain built specifically for education-related applications. Layer 3 chains sit above base Layer 1 and Layer 2 chains and are tailored for specific uses—in this case, education finance. EDU Chain enables tokenisation of student loans, allowing real-world assets to be represented digitally. It uses the EDU token, which is actively traded on major exchanges like Binance, to power transactions and lending activity. This infrastructure supports fast, transparent, and secure student lending globally.

How will the new Dubai office help Animoca Brands?

Dubai has emerged as a global hub for innovation, regulation, and adoption in Web3 technologies. By establishing an office there, Animoca Brands can build strategic partnerships, explore regional opportunities, and tap into a tech-savvy talent pool. With Omar Elassar leading as the regional MD and global head of partnerships, the company is well-positioned to drive its DeFi and education finance efforts across the Middle East and beyond. This move marks a significant step in expanding Animoca’s global footprint.

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