Pencil Finance Completes First Fully On-Chain Student Loan Cycle with $1 Million Deployment
Pencil Finance has successfully completed its first fully on-chain student loan cycle, deploying $1 million in loans on July 10, 2025. This milestone was achieved on EDU Chain, a layer-3 blockchain specifically designed for educational financing, which operates on top of Arbitrum. The entire process, from capital deployment to repayment records, is recorded on a public ledger, marking a significant advancement in decentralized finance for student loans.
The $1 million loan bundle was structured into two tranches. The senior tranche received $750,000 at a fixed annual percentage yield of 15%, while the junior tranche, amounting to $250,000, offered variable returns and bore the first-loss risk in case of borrower defaults. ErudiFi, an edtech lender with operations in the Philippines and Indonesia, manages the loans, handling the underwriting and student interactions, while Pencil Finance oversees the capital and ensures on-chain transparency.
This deployment follows Pencil Finance's earlier efforts, including securing $10 million in liquidity commitments in April 2025 and conducting a trial loan to HackQuest. The backing for this initiative includes support from Animoca Brands, Open Campus DAO, and NewCampus, which provided liquidity commitments. The choice to build on EDU Chain allows for lower transaction costs, making small loan tranches economically viable, while maintaining security inherited from Ethereum.
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Source: KLEA News