Pencil Finance

✏️ What is Pencil Finance?

Pencil Finance is a decentralized lending protocol designed to unlock capital for students through a novel structure of tokenized student loan bundles. By combining DeFi principles, dual-tranche lending, and NFT-backed junior positions, Pencil Finance enables anyone to fund future talent while earning yield and managing risk effectively.

🎯 Problem We Solve

Globally, student borrowers face high-interest rates, lack of access to credit, and opaque loan terms. Simultaneously, impact-driven investors lack direct, diversified ways to fund education with measurable returns. Traditional student loan models are exploitative, centralized, and disconnected from real economic value.

Pencil Finance bridges this gap by:

• Making student debt investable as an on-chain asset.

• Using tranching to align the risk/reward profile for diverse investor types.

• Empowering students to access funding through NFT-backed debt representation.

• Enabling communities and DAOs to act as next-gen education lenders.

💰 Invest and Earn Interest in Pencil Finance

With Pencil Finance, individual and institutional investors can:

• Browse curated loan bundles created by verified lending partners from around the world.

• Choose from two types of tokens:

  • Senior Tranche (Grow Token) – Lower risk, fixed return, paid at the end of the staking period.

  • Junior Tranche (NFT) – Higher risk, higher yield, with monthly or quarterly interest payouts.

• Track their portfolio via a personalized dashboard showing returns, bundle status, token value, and transaction history.

• Withdraw interest or redeem tokens based on bundle structure and maturity terms.

By participating, investors earn competitive yield while helping students access affordable education.

🏫 Lend and Raise Funds in Pencil Finance

Verified student loan companies (lending partners) can:

• Tokenize their student loan portfolios into investable bundles using a transparent, structured process.

• Create bundles with customizable parameters (total amount, tranche ratio, interest rates, maturity period).

• List bundles on the Pencil Finance platform to raise funds from a global pool of DeFi investors.

• Manage bundles through a dedicated dashboard:

  • Withdraw loan capital as needed

  • Deposit repayments and interest

  • Post updates and financial reports

Lending companies gain access to non-dilutive, flexible capital, reduce dependence on traditional financial intermediaries, and improve trust through transparent repayment tracking on-chain.

📈 Long-Term Vision

Pencil Finance aims to become the infrastructure layer for education finance in Web3:

• DAO treasuries and institutions can fund education as a yield-bearing, impact-driven asset class.

• Students can build on-chain credit history starting from their first educational loan.

• Lending terms can become portable, transparent, and global, reducing dependency on local banks or exploitative loan companies.

We envision a future where “learners are the new asset class”, and investing in education becomes as common as investing in startups or real estate.

🔗 Links

• 🌐 Website: https://www.pencilfinance.io

• 📄 Product Docs: https://pencil-finance.gitbook.io/pencilfinancedocs