Rocket LP DAO issued a $ 1,000 loan this week with Ethereum domain name as collateral. The company issued the loan for 90 days with a 15% interest rate and is the first loan ever to be issued with only an Ethereum name service domain name for collateral. Ownership of the domain name, represented as an NFT, has been temporarily given to Rocket as the issuer of the loan.
The loan was given to ENS director of operations Brantly Millegan.
NFTs are ERC-721 tokens that are created to represent a physical or digital asset digitally. The most common use case revolves around tokenizing ownership of valuable assets that can be transferred to another user using a smart contract. The 90-day loan, worth 6.5 ETH, was given to ENS director of operations Brantly Millegan earlier this week. The value of 6.5ETH at that was around $1,000. Even though Millegan retains the ability to use the domain name during the term of the loan, if the loan defaults, Rocket will gain the ownership of the Ethrerum domain name and has the right to remove Millegan’s access to it entirely.
Millegan has a strong incentive to repay the loan.
Brantly Millegan, in a Medium post, wrote that this is a great demonstration of how ENS names seamlessly fit into the fast-expanding universe of services that use Ethereum-based NFTs. He further explained that since ENS runs on Ethereum, which means ENS names can interact with other Ethereum smart-contracts, even those that have nothing to do with naming. In addition to features like censorship-resistance and security, this kind of interactivity in the Ethereum ecosystem is among the most interesting new capabilities blockchain technology brings to Internet naming, he further noted. Millegan explained in the post that Brantly is his first name, and this particular domain name has a great personal value to him, so he has a strong incentive to repay the loan, he added.
