Blur NFT marketplace Sees Huge Interest in Blend

On May 11, 2023

In the 11 days since its launch, the Blur NFT marketplace’ new lending platform, Blend, has sent shockwaves through the NFT industry. So far, registering over 3400 NFT backed loans valued at more than 55k ETH ($100m).

Through the Blend platform, collectors can secure ETH loans backed by one of 4 participating NFT collections, Azuki, Milady Maker, Wrapped CryptoPunks and DeGods. While also allowing them to purchase new NFTs with little more than an initial downpayment.

Since its launch, Blend has become the major lending platform in the NFT space, commanding approximately 75% of the market share. As a result, eclipsing existing long standing NFT lending platforms such as BendDAO, NFTfi, and Arcade.

According to data from Dune Analytics, in its first 10 days of operations Blend recorded 3000 loans from 900 unique lenders. A number that saw over 51k ETH borrowed against a host of high profile non-fungible assets. However, as the NFT market remains increasingly volatile, these loans could prove risky business for all involved.

BendDAO Offers a Cautionary Tale in the NFT Lending Market

Last year, when the NFT market began to sour, fellow NFT lending platform, BendDAO, faced a tricky situation when BAYC floor prices began to plummet. Essentially, seeing the drop in floor price outstrip the value of the loan, resulting in a potential liquidity crisis. At the time, the BAYC floor stabilized just in the nick of time, however, BendDAO was forced to hastily re-write its terms to protect itself from any further sudden decreases in NFT value.

Similarly, should the current bear market take a turn for the worse, and floor prices face another unexpected drop, those using Blend could end up in a tight spot. Essentially seeing lenders stuck with NFTs that don’t equal the value of the loan, and those taking out the loan unable or unwilling to pay back the borrowed ETH. However, due to the unpredictable nature of the NFT industry, the opposite could also be true!

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*All investment/financial opinions expressed by NFT Plazas are from the personal research and experience of our site moderators and are intended as educational material only. Individuals are required to fully research any product prior to making any kind of investment.