Ethereum Based Domain Name Used As Loan Collateral for First Time Ever

For the first time, an Ethereum domain name has been used as loan collateral. Backed only by rights to an Ethereum Name Service domain name, Rocket LP DAO (data access object) has issued a $1000 90-day loan. 

This loan agreement represents a new frontier in lending and domaining. 

The Ethereum domain name “brantly.eth” is registered to the Ethereum Name Service (ENS) director of operations Brantly Millegan. Millegan was the recipient of what he described as the “revolutionary” loan. 

Rocket LP DAO was founded in January to fund loans that use non-fungible tokens (NFTs) as collateral. NFT tokens represent unique digital or physical assets while retaining the digital ease of transfer and cryptographic security. NFTs help owners tokenize ownership or rare assets like crypto kitties, ENS addresses, and rare art. 

Like a reverse mortgage, the loans allow seekers to access the liquid value of their home using the collateral that the NFT represents.

At the end of the 90-day loan period, Millegan must pay back the loan in full with a 15% interest rate. Rocket has domain name authority over “brantly.eth” for 90 days, but Millegan maintains the ability to use it. If Millegan defaults on the loan Rockets keeps the domain name and can remove his content. 

Ironically, defaulting on the loan terms could results in an economic windfall for Millegan since he can buy many tld names for as little as $5 per month. 

However, the Ethereum and other crypto-based domain names have unique value beyond the name itself. The names can act as crypto wallets, identification, smart contracts, or other infrastructure with the data stored on the blockchain. 

We described the value of crypto domain names recently in a recent article about the value of blockchain in creating an uncensorable internet. 

Millegan told Decrypt:

“It shows that ENS names are more than just names, they can also fit into the wider world of NFTs and everything being done with them, in this case being collateral for a loan. I think this is one of the most revolutionary things that blockchain tech can bring to naming, namely programmability and the ability to interact with other smart contacts on Ethereum”