- Blur has launched a new lending protocol, Blend.
- Blend introduces NFT mortgaging, the first of its kind.
- The crypto community is skeptical about the protocol’s auctioning process.
Since its release, the NFT marketplace and aggregator Blur has stirred quite a storm in the sector. Its trader-friendly approach allowed it to account for over half of the trading volume generated by NFT traders, prompting other NFT marketplaces like OpenSea to follow suit just to stay relevant.
After which, Blur’s market dominance slowly dwindled as platforms like OpenSea Pro quickly dethroned it in daily users. Now, the platform has come out with another plan to shake up the NFT space – an NFT lending protocol.
While Blur expected a grand reception from its users with its promises of high yields, many had blurred reactions.
Blurry Reactions
Like most of Blur’s product announcements, its new lending platform has the Web3 community divided. While some herald Blend as a product that could significantly change the ecosystem, many fear that change.
Many users emphasized that the new protocol could significantly increase the risk of defaulting on the loan or, even worse, bring about a crisis similar to 2007’s subprime mortgage crisis, according to HUG co-founder Debbie Soon.
Despite peoples’ reaction to the new lending platform, many traders have already begun to take advantage of Blend, especially Machi Big Brother, who has already issued 58 loans worth 1,180 ETH or approximately $2.2 million.
According to Dune Analytics, Blend has facilitated over 13,845 ETH, or roughly $25.8 million, in loans at press time. Azuki, Wrapper CryptoPunks, and Milady NFT collections represent the largest collateral, collectively recording over 6500 ETH or around $12 million.
What is Blend?
Blend is Blur’s new peer-to-peer perpetual lending protocol for NFTs. Short for Blur Lending, the platform allows users to take loans out on their existing assets as well as enables liquidity providers to earn interest by loaning out ETH with their NFTs serving as collateral.
What’s unique about Blend is that it’s perpetual, meaning loans don’t have a fixed time to be repaid, unlike most lending protocols. It does so by removing dependencies on oracles, which are external off-chain data sources.
With Blend, loans will accrue interest until repaid or until the lender triggers a Dutch auction, which allows other lenders to take over the loan. In case another lender doesn’t take up the offer, a liquidation auction will be triggered for the NFT collateral.
The platform employs a very similar process to a mortgage. Users can put down payments on NFTs and then finance the remaining balance.
Blur shared that Blend has no fees for traders and lenders and enables “10x higher yield opportunities than most DeFi protocols”.
Blur built the protocol in collaboration with Dan Robinson and his team at Paradigm, which notably led Blur’s $11 million seed funding round on March 22.
On the Flipside
- Blockchain security company Peck Shield reported that over $3 million worth of NFTs were stolen in April, and 70% of those stolen NFTs were sold on Blur and 28% On OpenSea.
Why You Should Care
Blur’s new initiative could change how NFTs are generally perceived. The new lending protocol gives NFTs an additional layer of utility over ‘just’ being digital images by treating them as properties.
Balaji Srinivasan just burned $1 Million to prove a point:
Ex-Coinbase CTO Burns $1M Bitcoin: “They’re Printing Trillions.”
Read about Crypto hacks and scams in April:
Stolen Crypto Hits 100M in April Across Popular Platforms such as Blur. How Can You Stay Safe?
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- Source: https://dailycoin.com/blurs-nft-lending-protocol-blend/
