30 April 2025 – Pencil Finance, the student loan real-world-asset (RWA) protocol on EDU Chain that is co-incubated by Animoca Brands and HackQuest, today announced that Open Campus and Animoca Brands have deployed US$10 million in liquidity as loan collateral to facilitate DeFi student loans on the Pencil Finance platform.
Pencil Finance is a decentralized lending protocol designed to bring student loan financing on-chain, transforming how student debt is serviced. It connects global investors with trusted student loan originators through tokenized loan bundles.
EDU Chain is a Layer 3 blockchain on Arbitrum Orbit that is designed for consumer-facing education apps and on-chain education finance (EduFi). EDU Chain is powered by the EDU token (EDU) which is listed on Binance, KuCoin, Gate.io, Bithumb, MEXC, Bitmart, and various other exchanges.
Open Campus, which is the foundation behind EDU Chain, and Animoca Brands have contributed US$10 million as liquidity to Pencil Finance to be used as loan collateral. The goal is to expand access to education financing through blockchain technology.
Recent policy changes in the U.S. could put millions of borrowers at risk of defaulting on their student loans, highlighting the urgent need for accessible, transparent, and efficient financing solutions for the student loan market, which is estimated to be worth around US$3 trillion globally (Market Research Future, April 2025).
Yat Siu, co-founder and executive chairman of Animoca Brands, 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. 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.”
Harry Zhang, co-founder and CMO of HackQuest, said: ‘This milestone demonstrates the real-world impact of blockchain in education. On-chain loans empower students and open new opportunities for investors.”
Through Pencil Finance’s student loan RWA protocol, whitelisted users can provide liquidity to loan pools. Whitelisted users can choose to deploy capital to a Senior Tranche or a Junior Tranche for higher returns with first-loss risk. Pencil Finance enables loans to be deployed, and repayments to be managed, transparently on-chain.
Pencil Finance issued its first loan this week; the recipient is HackQuest, which will use the loan proceeds to incentivize student developers learning about EDU Chain on the HackQuest platform.
