NFT marketplace Blur recently has hit another major milestone as its innovative lending platform, Blend, facilitated over 100,000 ETH in total volume
According to data from Dune Analytics, the total volume is equivalent to approximately $181 million within only 17 days since its launch. As of the time of writing, Blend has a total of 963 unique borrowers and 1,303 unique lenders, with 9.594 loans accepted.
Blend initially featured four NFT collections on its roster upon its release — Azuki, Wrapped Cryptopunks, DeGods and Miladys. The Bored Apes Yacht Club (BAYC) and Mutant Ape Yacht Club (MAYC) then joined the lineup on Monday, allowing users to borrow up to 40 ETH using their BAYC and MAYC collections for just $1.
BAYC and MAYC generated a combined volume of 2,267 ETH on their debut. By Wednesday, BAYC became the third-most traded collection on the platform, recording a volume of 3,082 ETH, following Azuki (4,616 ETH) and Wrapped Cryptopunks (2,260 ETH).
With a total volume surpassing 50,000 ETH, Azuki remains the leading collection, accounting for nearly half of the platform’s total volume since its inception.
Blend allows users to use NFTs as collateral to secure Ethereum loans, which borrowers can use to purchase new NFTs on the Blur marketplace.
In exchange, liquidity providers receive interest that will continue to accrue until the borrower repays the loan, fueling the emergence of the specialized “NFTfi” sector within the cryptocurrency realm.
A highly advanced off-chain offer protocol enables the seamless pairing of lenders and borrowers, ensuring the best possible interest rates for all parties involved.
Blend allows lenders to earn a yield on their assets with customizable rates based on the perceived lending risk. Established collections may have lower interest rates, while more volatile collections can have higher rates.
By eliminating the need for forced liquidation during times of pressure, Blend helps prevent significant losses for borrowers. This does not mean Blend is risk-free, however. Borrowers risk accumulating interest that surpasses the value of their NFT, potentially leading to losses if they fail to repay the loan promptly, and the interest rate will keep increasing if another party does not take over the loan.
Lenders, on the other hand, risk borrowers choosing not to repay their balance, and even if the collateralized NFT is accessible, selling it may not fully cover the loan amount.
For now, Blend does not charge any fees to borrowers or lenders. However, the platform may implement fees in the future, depending on votes by token holders after 180 days.
Since its launch last fall, Blur has quickly become a dominant NFT marketplace, responsible for almost 59 percent of the total NFT transaction volume to date. It also outperformed its rival with 74 percent in trading volume, while OpenSea attracted only 24 percent.
However, there were concerns about potential wash trading activities on the platform, particularly during its token launch. Analysts, such as Hildhobby, have noted that Blur had only 14,575 traders compared to Opensea’s 46,353.
In February, CryptoSlam, a platform for tracking NFT sales, decided to exclude $577 million worth of Blur trades from its data, citing “market manipulation.”
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