- Pencil Finance completed a $1 million student-loan cycle fully on-chain, from investor capital to repayment with yield.
- The bundle financed loans for more than 6,600 students at 118 institutions across Southeast Asia.
- Investors were divided into senior and junior tranches, with the junior tranche absorbing first losses from defaults.
Pencil Finance, an Animoca Brands-incubated decentralized lending protocol, has completed a $1 million student-loan cycle entirely on-chain, according to an announcement. The cycle included raising capital, issuing loans, recording repayments, and returning funds with yield to investors.
Education-financing company ErudiFi issued the loans, which Pencil Finance packaged as an on-chain private-credit investment. The bundle funded loans for more than 6,600 students at 118 schools and universities, with about 1,050 students receiving funding directly attributable to the protocol.
Animoca Brands, Open Campus, and NewCampus funded the bundle in July 2025. Pencil Finance operates on EDU Chain, an education-focused Ethereum-based network built using Arbitrum Orbit.
The company called it the first fully on-chain student-lending cycle, though this claim could not be independently verified. ErudiFi deployed most of the capital through student loans and tuition financing across Southeast Asia, including Indonesia and the Philippines.
Investors were split into a senior tranche offering fixed returns and repayment priority and a junior tranche offering variable returns while absorbing first losses from defaults. Across ErudiFi‘s portfolio, half of borrowers are women, 93% come from lower-income households, and 52% are using formal credit for the first time.
“Education lenders in emerging markets are creditworthy but invisible,” said Frank Li, co-founder of Pencil Finance. “Putting the lending cycle on-chain changes that: every repayment is recorded and auditable by anyone, in real time.”
Animoca Brands wrote on X that the protocol deployed loans, serviced repayments, and returned capital with yield, with every step recorded transparently on blockchain. The company did not disclose interest rates, investor yields, or defaults for the bundle.
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