Summary
- Pencil Finance has successfully completed a $1 million student loan cycle entirely on-chain.
- The funding has supported over 6,600 students across 118 educational institutions.
- Details regarding interest rates, investor returns, defaults, or specific blockchain transaction data were not disclosed by the company.
Pencil Finance, a project supported by Animoca Brands, has announced the successful completion of a $1 million student loan cycle that was fully executed on the blockchain, encompassing everything from capital raising to repayment tracking and investor returns.
The loans were issued by ErudiFi, an education financing firm, and packaged by Pencil Finance into an on-chain private credit investment vehicle. This innovative approach allows funders to contribute capital and track repayment progress via blockchain technology.
Myriad: What’s next for Ethereum's price? Share your prediction.Pencil Finance has touted this as the first fully on-chain student lending cycle, though this assertion has not been independently verified. The funding for this initiative came in July 2025 from Animoca Brands, Open Campus, and NewCampus.
“The protocol deployed loans totaling US$1 million to borrowers, managing repayments and returning the capital to investors with yield, with all activities transparently recorded on the blockchain,” stated Animoca Brands on X.
This lending protocol operates on the EDU Chain, a network that focuses on education and is built on Ethereum technology utilizing Arbitrum Orbit. Pencil Finance was co-incubated by Animoca Brands and the developer community HackQuest.
ErudiFi primarily allocated this funding through student loans and tuition assistance in Southeast Asia, specifically in countries like Indonesia and the Philippines. According to the company, this capital has aided over 6,600 students across 118 institutions within a year, with approximately 1,050 students receiving funding directly linked to Pencil Finance.
Investors were categorized into two tranches: a senior tranche that provided fixed returns and repayment priority, and a junior tranche that offered variable returns while taking on the initial risk of defaults.
ErudiFi's borrower demographics reveal that 50% are women, 93% come from low-income families, and 52% are accessing formal credit for the first time, as reported by the company.
“Education lenders in emerging markets are creditworthy but often overlooked. Global capital struggles to verify their performance, which prevents funds from reaching them,” remarked Frank Li, co-founder of Pencil Finance. “By placing the lending cycle on-chain, we change that: every repayment is recorded and can be audited in real-time. This initiative has established a public track record that will facilitate easier funding for future bundles.”