Blend Protocol Revolutionizes NFT Lending Market
In a remarkable display of demand, the newly-launched Blend protocol on Blur’s NFT marketplace has facilitated over $16 million in loans within just one day. Blend offers perpetual NFT lending, allowing users to pledge NFTs as collateral for loans.
Leading Lender: Machi Big Brother
Taiwanese celebrity and avid NFT collector, Machi Big Brother, is the top lender on Blur’s platform, having issued 58 loans worth 1,180 ETH. He is well known for his love of the Bored Ape Yacht Club NFT series and his record-breaking NFT sales in February.
Top NFT Collections as Collateral
Azuki, Wrapped CryptoPunks, and Milady NFT collections are the largest collateral on the platform, with a combined market value of over 8,000 Ether. With a total of 846 active loans and eight refinancing events, the Blend protocol has already made a splash in the NFT lending market.
Perpetual Lending and No Fees
The Blend protocol charges neither borrowing nor lending fees, only interest, and offers perpetual lending. This means loans are automatically extended at expiry, provided neither party objects. Additionally, loans can be refinanced or held at Dutch auction in case of interest rate changes.
NFT Lending Protocols: A Cautionary Tale
Despite Blend’s early success, it’s essential to remember the risks associated with NFT lending. Last year, the crypto bear market left many NFT collectibles illiquid, and some protocols, like BendDAO, struggled to pay back lenders after facilitating thousands of ETH in loans.
Embracing Opportunities and Managing Risks
The rapid success of Blur’s Blend protocol in the NFT lending market, spearheaded by Machi Big Brother, highlights the growing demand for innovative lending solutions in the NFT space. As more users embrace these new opportunities, it’s crucial for both borrowers and lenders to be aware of potential risks, such as illiquidity, and to approach NFT lending with caution. By striking the right balance between innovation and risk management, the Blend protocol and its users can continue to drive the NFT market forward and foster a sustainable ecosystem.
