Animoca Brands deploy US$10m for Web3 student loans with Open Campus, opens Middle East office

Animoca Brands and Open Campus have deployed US$10m in liquidity for a blockchain student loan platform.

The funding will support a student loan real-world-asset protocol on EDU Chain, facilitating decentralised finance-based student loans on the Pencil Finance platform. Pic: Getty Images.

• Open Campus and Animoca Brands have contributed US$10m as liquidity to be used as loan collateral

• Pencil Finance, a decentralised lending protocol designed to bring student loans on-chain, is being used for the funding facilitation

• Animoca Brands has also opened a new office in the Middle East, appointing Omar Elassar as managing director for the Middle East and head of global strategic partnerships

Special Report: As US student loans come under pressure from the Trump administration’s changes to forgiveness and repayment schedules, Animoca Brands has deployed liquidity for blockchain-based student loans.

Using the student loan real-world-asset protocol Pencil Finance on the EDU Chain, Animoca Brands and Open Campus have offered up US$10m in liquidity to support decentralised finance student loans.

The Pencil Finance platform is designed to bring student loan financing “on chain” and connect global investors with trusted student loan originators through tokenised loan bundles.

The blockchain supporting the platform, EDU Chain, is a “layer 3” chain designed for consumer-facing education apps and education finance. Layer 3s are a relatively new blockchain innovation, built on top of base layer 1 and 2 blockchains for specialised functionality and enhanced interoperability.

The EDU Chain is powered by the EDU token, which is listed on multiple crypto exchanges, including Binance.

Animoca Brands co-founder and executive chair Yat Siu said blockchain is redefining how education is funded and developed.

“By bringing student loans on-chain, this initiative seeks to boost transparency, efficiency, and Web3 adoption for potentially hundreds of millions of students globally, while also increasing financial literacy,” he said.

“We believe this will have very significant implications for the US$3 trillion student loan market.”

Millions at risk of defaulting on student loans

Meanwhile, analysis by Market Research Future has highlighted the risk to millions of student loan holders in the US, after the US Education Department signalled it would begin collecting payments on defaulted student loans.

"Debt cannot be wiped away. It just ends up getting transferred to others," press secretary Karoline Leavitt told reporters a day after the announcement was made.

"The government can and will collect defaulted federal student loan debt by withholding money from borrowers, tax refunds, federal pensions and even their wages. ... If you take out a loan, you have to pay it back."

Pencil Finance, however, is looking to provide new pathways to service student loans through its RWA protocol, wherein whitelisted users can provide liquidity to loan pools.

Those users can then choose to deploy capital to a senior tranche or a junior tranche for higher returns with first-loss risk.

The loans can be deployed and repayments managed all within the blockchain.

“Blockchain technology allows us to reimagine student lending from the ground up,” Pencil Finance co-founder Frank Li said.

“By bringing loans on-chain, we deliver transparency, efficiency, and access at a global scale, helping students everywhere unlock new educational opportunities.”

Animoca Brands opens first office in the Middle East

In another step forward in Animoca Brands’ global expansion, the company has opened its first office in the Middle East, selecting Dubai in the United Arab Emirates to explore potential Web3 opportunities and partnerships in the region.

Omar Elassar has been appointed as managing director for the Middle East and head of global strategic partnerships.

Animoca Brands group president Evan Auyang said Elassar’s deep expertise in Web3 makes him an exceptional addition to the team.

“His leadership will be a key driver in driving Animoca Brands' strategic growth in the Middle East and beyond,” Auyang said.

Omar will oversee the company’s growth and operations in the region, playing a key role in expanding Animoca Brands’      presence and visibility in the Middle East.

The company says the new hub will serve as a platform to engage with local and international partners, foster innovation, and guide strategic direction, operations and partnership initiatives to enhance Animoca Brands’ presence in the Middle East.

"We are excited to establish our first office in the Middle East, one of the world's most connected innovation hubs, to leverage the region's vibrant landscape and support the evolving needs of the Web3 industry locally and globally,” Elassar said.

“Joining Animoca Brands at this phase in its journey presents a unique opportunity to work with visionary builders and contribute to the wider integration of blockchain technology in a market that is poised for significant growth."

This article was developed in collaboration with Animoca Brands, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.

Originally published as Animoca Brands deploy US$10m for Web3 student loans with Open Campus, opens Middle East office