Open Campus and Animoca Brands Provide $10M for Blockchain Student Loans

Pencil Finance has issued its first on-chain student loan after securing $10 million in liquidity support from Open Campus and Animoca Brands. The goal is to reshape how student loans work by moving the process entirely onto the blockchain.

Good to know

• Pencil Finance uses real-world-asset protocols to bring student loans on-chain.
• Open Campus and Animoca Brands contributed $10 million as collateral.
• The first loan was issued to HackQuest to support student developers.

Pencil Finance, a decentralized lending protocol co-incubated by Animoca Brands and HackQuest, now operates with fresh liquidity backing. Open Campus and Animoca Brands have deployed $10 million to serve as loan collateral, enabling decentralized student loans through Pencil Finance’s platform.

The protocol connects global investors with verified student loan originators using tokenized loan bundles. Loans and repayments are processed on-chain, improving transparency while reducing administrative complexity.

Pencil Finance runs on EDU Chain, a Layer 3 blockchain built with Arbitrum Orbit. EDU Chain supports education-related finance and apps. It uses the EDU token, which trades on exchanges including Binance, KuCoin, Gate.io, Bithumb, and others.

The student loan market is valued at around $3 trillion worldwide, and recent U.S. policy changes have raised concerns about default risks for millions of borrowers. Blockchain platforms like Pencil Finance aim to offer better alternatives by removing friction from the borrowing process and making loan management more efficient.

Yat Siu, co-founder and executive chairman of Animoca Brands, shared the broader vision. “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. We believe this will have very significant implications for the US$3 trillion student loan market.”

Frank Li, co-founder of Pencil Finance, said:

 “Blockchain technology allows us to reimagine student lending from the ground up. By bringing loans on-chain, we deliver transparency, efficiency, and access at a global scale, helping students everywhere unlock new educational opportunities.”

HackQuest co-founder Harry Zhang added, “This milestone demonstrates the real-world impact of blockchain in education. On-chain loans empower students and open new opportunities for investors.”

Pencil Finance allows whitelisted users to fund loan pools by choosing between a Senior Tranche or a higher-risk Junior Tranche, offering different returns and risk levels. The platform issued its first loan this week to HackQuest, which will use the funds to incentivize student developers on its learning platform.