Blur quickly gained recognition in the NFT space, and its lending protocol, Blend, appears to be following suit. Blend’s popularity has skyrocketed since its launch in May, overtaking its competitors and dramatically increasing overall NFT loan volumes.
According to data from dapp radarThe blend secured a trading volume of 169,900 ETH ($308 million) in just 22 days. What is the trading volume of all NFT lending platforms? That reached about $375 million, meaning Blend secured a staggering 82 percent of lending volume across all NFT lending protocols within a month. .
Additionally, Blend’s market share is likely to increase as its products continue to expand.Currently Miladys, Azukis, DeGods, and Wrapped version of CryptoPunks. However, Blur recently announced that it will start financing Clone X, with other projects expected to be added in the near future.
1/ 🚨Notice of Blending🚨
Blur Lending (Blend) support is coming soon for Clone X. pic.twitter.com/oN2HR5hVTL
— Blur (@blur_io) May 25, 2023
Blend’s entry into the NFT lending market follows Blur’s previous success.According to the analysis of delphi digitalBlur quickly surpassed OpenSea to become the market leader, securing 53% of the NFT marketplace market share just a few months after its launch. This was largely driven by his Blur native token airdrop in Q1 2023, which resulted in a significant increase in his NFT trading volume on Ethereum.
Despite Blend’s impressive market dominance, the act of using NFTs as collateral for loans is not without risk.
What you need to know
With Blend, a borrower pledges NFTs as collateral for a loan, establishes the terms of the loan, and is given Ethereum by the lender. The borrower then receives the Ethereum from the lender and the NFT remains as collateral.
Many have already experienced the downsides of such practices.
2022, Boad Ape Yacht Club (BAYC) NFT Prices fell 80% in 6 weeks. Those who over-leveraged by using monkeys as collateral for loans faced margin calls. This is a situation where the lender requires additional collateral to cover the loss of property value.
But despite the risks, Blur’s momentum shows no signs of slowing down. On May 24, the company announced a new feature that users can “extend”. [their] You can take out a loan by paying back as little as 0.1 ETH instead of paying it all off at once. ”
1/ 🚨Feature Notice🚨
You can now borrow ETH and pay it back little by little over time instead of all at once.
This works for BNPL purchased NFTs and direct borrowed NFTs. pic.twitter.com/GtUzAzDBwp
— Blur (@blur_io) May 24, 2023
Users can borrow ETH and pay it back in small increments over time rather than all at once. This strategic move may not only retain existing users, but also continue to attract new entrants to the platform. However, while Blend’s rapid rise in the NFT lending market is undoubtedly impressive, it is important that participants understand and manage the inherent risks associated with using NFTs as collateral for loans.
Editor’s Note: This article was written by an nft now staff member in collaboration with OpenAI’s GPT-4.
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