Pencil Finance, backed by Animoca Brands Corporation Ltd and HackQuest, has successfully issued its first student loan capital raised entirely on-chain via its real-world asset (RWA) protocol on EDU Chain. This milestone represents the first instance of student loans being funded from capital originating on-chain, demonstrating how decentralised finance (DeFi) can drive broader access to education.
The inaugural loan bundle of US$1 million was funded by Animoca Brands, Open Campus and NewCampus. Of this, US$750,000 was allocated to a Senior Tranche offering a fixed 15% annual percentage yield (APY), while US$250,000 went to a Junior Tranche with variable APY and first-loss risk.
Education financing provider ErudiFi received a portion of the loan capital to issue tuition funding across the Philippines and Indonesia. Edtech-focused Transcend Network was also supported, enabling loans to founders building education businesses across more than 60 countries.
“Today marks a historic turning point for both blockchain and education,” said Yat Siu, co-founder and executive chairman of Animoca Brands. “Pencil Finance has introduced a new real-world asset class where eligible users can earn yield that is generated from educational loan repayments. By issuing student loans with funds that originated on-chain for the first time, Pencil Finance demonstrates how decentralised technology can directly empower learners and transform access to education worldwide. This is an example of how blockchain can make a real, positive difference in people’s lives.”
How it works
Pencil Finance’s dual-tranche protocol enables participants to select risk and return profiles while ensuring full transparency on the blockchain. Liquidity providers receive returns as loan recipients repay their loans over time.
“This milestone is more than just a technical achievement — it’s proof that blockchain can drive meaningful social impact,” said Frank Li, co-founder of Pencil Finance.
Cameron Wang, co-founder and chief operating officer of HackQuest, added: “Using on-chain capital to issue student loans is history in the making. We are witnessing blockchain technology providing practical, life-changing solutions for students and families. This is just the beginning of our journey to tokenise the student loans market and increase access to education.”