TLDR:

• FTX bankruptcy claims have been tokenized into NFTs
• A creditor successfully turned a $31,307 bankruptcy claim into a valuable NFT
• This tokenization of bankruptcy claims allows creditors to unlock capital by leveraging their claims as collateral, ensuring loan repayment

In a surprising turn of events, FTX bankruptcy claims have been tokenized into non-fungible tokens (NFTs), revolutinising the world of decentralised finance (DeFi) and unlocking a wave of possibilities for on-chain loans.

A creditor from FTX has successfully transformed their $31,307 bankruptcy claim into a valuable digital asset using NFTs.

This NFT collateral has facilitated a $7,500 loan through Arcade, which previously facilitated a loan of 14,500 USDC against 2 Rolex watches.

This tokenization of bankruptcy claims provides creditors with an innovative method to unlock capital by leveraging their claims as collateral.

By establishing ownership rights through NFTs, these creditors ensure loan repayment, creating a win-win situation for both parties involved.

This process, known as real-world asset (RWA) tokenization, extends the boundaries of DeFi by enabling the tokenization of various real-life assets.

Real world asset (RWA) tokenization, a popular process in DeFi, allows for the tokenization of various real-life assets like stocks, bonds, and real estate.

To facilitate this process, both the creditor and lender must undergo Know Your Customer (KYC) and Anti-Money Laundering (AML) checks.

Found, the bankruptcy claims service, offers users access to loans backed by bankruptcy claims, with a 10% fee on successful trades.

The use of NFTs to tokenize bankruptcy claims opens up new possibilities in DeFi, allowing individuals to leverage their claims as collateral and unlock capital.

The tokenization of bankruptcy claims into NFTs represents a significant milestone in both Web3 technology and traditional financial systems.

It showcases the potential of tokenization and highlights the role of DeFi in liberating capital and streamlining financial transactions.