Arcade has closed a $15 million Series A funding round to bring collateralized lending that connects the fast-growing non-fungible token (NFT) space to decentralized finance (DeFi).

The funding will be used to build products and add personnel, including in legal to help the company navigate the regulatory landscape, Arcade co-founder Gabe Frank told CoinDesk in an interview.

The round included noted crypto investor Pantera Capital, and other investors included Castle Island Ventures, Franklin Templeton, BlockFi CEO Zac Prince and Quantstamp CEO Richard Ma.

Arcade appraises, validates and curates NFT collections for institutions, decentralized autonomous organizations (DAOs) and wealthy collectors. Lenders gain access to a new income source and asset owners can achieve liquidity on their holdings, while retaining all rights and access to collateral on Arcade.

Arcade is fully compatible with all ERC-20 tokens, including wETH, USDC and DAI. The company’s Wrapped NFT technology allows multiple NFT assets to be bundled and utilized to acquire a single loan. Arcade is also an open-source DeFi primitive that allows developers to build on top of the platform.

Arcade’s Frank first entered the crypto space professionally in 2018, but he had long understood the power of fungible assets. HIs family owned a chain of pawn stores in Texas, which gave Frank insight into loans collateralized with non-fungible physical assets such as diamonds, watches and paintings.

“I started collecting NFTs and realized that there was an infrastructure gap in terms of getting liquidity on these assets,” said Frank. As market caps soared, he reasoned the same credit markets that popped up around physical assets would form around the non-fungible assets.

Arcade is coming out of a private release with $3.3 million in total loan volume secured on $10 million worth of assets on the Arcade platform.

“Arcade’s collateralization of this new asset class will incentivize the participation of new entities from both the traditional and digital art and finance worlds, including institutional lenders, high-net-worth individuals, DAOs, companies with NFTs on their balance sheets and NFT collectors and creators,” said Pantera Capital principal Lauren Stephanian in a press release.

As an increasing number of people own NFTs, there’s a growing demand for accompanying DeFi applications. Other NFT derivatives projects have included fractionalized platform Fractional, stacking provider NFTx, cross-chain liquidity protocol Taker and NFTfi, another company offering collateralized lending against NFTs.