The NFT market has seen significant growth, with many collectors having valuable NFTs in their wallets. However, accessing liquidity after purchasing an NFT can be a challenge. Blur tackles this problem by introducing BlendA borrowing and lending protocol which offers perpetual loans for NFT holders without specific expiration dates, thereby reducing the risk to the NFTs themselves.
1/ Introducing Blend: the Peer-to-Peer Perpetual Lending Protocol for NFTs.
Built in collaboration with @danrobinson and @ transmissions11 did @paradigmBlend enables 10x higher yield opportunities than current DeFi protocols and unlocks greater liquidity for NFTs.
Here’s how
pic.twitter.com/uOFC6i3LSq
— Blur (@blur_io) May 1, 2023
The Blend protocol has been audited by CodeArena and ChainLight but remains recent, use the protocols Challenge with caution.
Blur unveils unique loan structure with Blend
loan protocols NFT traditional often have short expiration dates, putting NFTs in immediate danger. Blend wants to eliminate this problem by offering loans with fixed amounts and rates that accrue interest until the borrower pays off the balance. Lenders can create loan offers for NFT collections and receive a return while having the option to liquidate their loans in a 30-hour auction.
Blend aims to provide NFT holders with greater access to liquidity, with lenders and borrowers able to connect through the protocol. THE NFT’s of value can offer access to better loan rates, making them even more attractive as an investment. Lenders can also generate returns on their assets by offering loans to established or volatile collections, depending on their risk tolerance.
By providing NFT holders with an alternative way to access funds, Blend wants reduce the need for collectors to liquidate their holdingsrelieving selling pressure on existing collections and encouraging more buyers for new ones.
The risks associated with the use of Blend remain similar to using a traditional lending platform. Borrowers risk losing their NFT if accrued interest exceeds the value of the NFT and they fail to repay the loan. Lenders, on the other hand, risk not seeing the loan repaid and, if no other lender is interested in repurchasing the loan, they may receive the pledged NFT, which may not cover the loan balance upon redemption. liquidation.
Future developments of Blend
Blend is governed by Blur’s DAO (decentralized autonomous organization) and is directly accessible from the Blur marketplace. Some collections already have Blend enabled.
In order to attract as many users as possible, no platform fees will be applied during the first 180 days. After this period, the Blur CAD will decide whether to change fees for borrowers, lenders or both. The DAO will also determine adjustments regarding the 30-hour auction period, maximum annual interest rate, and other aspects of the protocol.
Currently, administrative access to the protocol comes from a multi-signature wallet, which performs updates decided by the DAO and can also terminate the protocol in case of emergency, but Blur promises to work to make the protocol as decentralized as possible.
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