HomeTrending NewsBlend Secures Top Spot in NFT Lending With 82% Market Share

Blend Secures Top Spot in NFT Lending With 82% Market Share

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Blur shortly gained recognition within the NFT sector, and its lending protocol, Blend, appears to be following swimsuit. Blend’s reputation has skyrocketed since its launch in Might, eclipsing its rivals and in addition dramatically growing the general quantity of NFT loans.

Based on information from DappRadar, Blend secured 169,900 ETH ($308 million) in buying and selling quantity in simply 22 days. The buying and selling quantity throughout all NFT lending platforms? It reached about $375 million, which means that Blend secured a staggering 82 % of the lending quantity throughout all NFT lending protocols in lower than a month. 

What’s extra, Blend’s market share is prone to enhance as its providing continues to develop. At present, it helps loans backed by 4 NFT collections: Miladys, Azukis, DeGods, and wrapped variations of CryptoPunks. Nonetheless, Blur lately introduced it might be launching lending for Clone X, and different tasks are anticipated to be added within the close to future.

Blend’s emergence within the NFT lending market follows Blur’s earlier success. Based on analytics from Delphi Digital, Blur secured 53% of the NFT market market share only a few months after its launch, shortly surpassing OpenSea to turn into the market chief. This was largely pushed by Blur’s native token airdrop in Q1 2023, which resulted in a major enhance in Ethereum’s NFT buying and selling volumes​.

Regardless of Blend’s spectacular market dominance, the apply of utilizing NFTs as collateral for loans is not with out its dangers.

What to know

With Blend, Debtors pledge their NFTs as safety for a mortgage, set up the situations of the mortgage, and are given Ethereum from a lender whereas the NFT stays as collateral.

Whereas it looks like a dream come true to have the ability to buy blue-chip NFTs — or different gadgets — with out having the mandatory funds upfront, many have already skilled the downsides of such practices. For instance, what occurs when flooring costs immediately drop?

A scenario like this occurred in 2022, when Bored Ape Yacht Membership (BAYC) NFT costs dropped by 80% in six weeks. Those that had over-leveraged themselves by utilizing their Apes as collateral for loans confronted margin calls, a scenario the place lenders request extra collateral to compensate for the decreased worth of the asset​.

However regardless of the dangers, Blur reveals no indicators of slowing down. The corporate introduced a brand new characteristic on Might 24 that may enable customers to “extend [their] loans by paying down as little as 0.1 ETH instead of repaying the full amount at once.”

This strategic transfer is just not solely prone to retain present customers but additionally to proceed to draw new individuals to the platform. Nonetheless, whereas Blend’s fast ascension within the NFT lending market is undoubtedly spectacular, it will be significant for individuals to grasp and navigate the inherent dangers concerned in utilizing NFTs as collateral for loans.

Editor’s word: This text was written by an nft now workers member in collaboration with OpenAI’s GPT-4.



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