Animoca Brands Chairman Sees 10% Student Loan Shift Boosting DeFi TVL 400%

Animoca Brands chairman Yat Siu has highlighted the potential of onchain student loans to significantly boost the decentralized finance (DeFi) industry. Speaking at a recent event, Siu pointed out that the global student loan market, valued at $3 trillion, represents a vast opportunity for the crypto industry. He suggested that moving even 10% of this market onto blockchain technology could more than quadruple the total value locked (TVL) in DeFi, underscoring the industry's nascent stage and its potential for growth.

Siu emphasized that Web3-based financial tools tailored for the education sector could drive widespread crypto adoption, particularly among younger and unbanked populations. He compared this scenario to how PayPal and Venmo scaled by providing essential services to underserved users. By offering student loans onchain, regulated, faster, and cheaper, students could become lifelong users of crypto, serving as an entry point for the technology into the mainstream.

Animoca Brands has recently invested in Pencil Finance, a startup that provides crypto-native student loans. Pencil Finance operates in markets such as the Philippines and Indonesia, with plans to expand into the United States. The startup has announced a $10 million student loan financing initiative aimed at providing cheaper, blockchain-backed loans. Siu believes that such positive-sum use cases, where everyone benefits, will make students more pro-crypto by offering them more opportunities through crypto loans.

Siu also noted that education is a natural use case for Web3 technology. He highlighted platforms like YouTube and TikTok, which were initially dismissed as entertainment applications but have since become the largest informal learning platforms globally. Siu argued that Web3 could similarly integrate financial infrastructure into educational experiences, turning learning communities and reputational networks into capital assets. This integration could form the basis of a new, decentralized financial ecosystem, where education and finance are seamlessly intertwined.