Michael Levy made a $20 million dollar fortune in just 6 months on an early $175,000 bet in NBA Top Shot, a non-fungible token marketplace where sports fans can buy and sell video highlights of basketball players.
Then, as the project ballooned into a billion-dollar economy, Levy and a few other early adopters honed in on an idea for a decentralized lending platform where users could get quick cash by borrowing against the Top Shot “moments”. Paying homage to Top Shot’s host blockchain Flow, they called it Flowty.
The initiative caught the attention of NBA Top Shot and Flow developer company Dapper Labs, which invested in Flowty’s $4.5 million seed round, announced today, along with Greenfield One and Lattice Capital, among other investors.
“We’ve always had this thesis around games being the gateway to people decentralizing their lives,” says Dapper Labs’ chief business officer Mik Naayem. He thinks Flowty plays a “crucial” role in proving that thesis.
The platform operates much like a pawn shop, except there’s no middleman, Levy, Flowty’s cofounder and CEO, explains. The borrower creates a listing setting the desired terms and putting up a single NFT as security on that loan. If someone decides to fund it, they either get their money back with interest or the borrower’s NFT, which gets locked into the platform. If the NFT is transferred out of the borrower’s wallet before the loan gets funded, the listing becomes invalid.
Flowty collects 10% of the borrower’s interest on a loan. The loans can be denominated in FLOW, FUSD (Flow blockchain’s dollar-pegged stablecoin), tUSDT (the Flow blockchain version of Tether) and USD Coin. No internal ratings or customer checks.