The Hottest Space in Web3 Right Now

TL;DR

• Blend lets you take a loan out on your NFTs, providing you with access to cash that you can then go and reinvest, or spend on whatever you like.

• Meanwhile, liquidity providers earn interest by loaning out ETH, with the NFT serving as collateral.

• If the borrower can’t repay the loan, another lender can take over the loan in the event of a refinancing auction – or in the worst case scenario, a liquidation auction can be run for the original NFT that was loaned against.

• Based on the resurgence of NFT trading, and with the next bull run in sight, the peer-to-peer NFT trading space may be one to watch!

Full Story

Things are getting hot in the NFT lending space.

Loans backed by NFT ownership recently topped $1B USD, with lending protocol NFTfi facilitating over $406 million worth of loans to date. BendDAO is second highest with about $308 million worth, as per data from Dune.

And hot is about to get hotter

The number one (based on trading volume) NFT marketplace, Blur, just released a new peer-to-peer lending protocol called ‘Blend.’

Here’s how it works:

Imagine you own a few valuable NFTs.

Blend lets you take a loan out on your NFTs, providing you with access to cash that you can then go and reinvest, or spend on whatever you like.

Meanwhile, the folks fronting the cash earn interest by loaning out ETH, with the NFT serving as collateral.

And it’s all peer-to-peer (no middle man).

Where Blend is different compared to some of the other lending protocols, is that Blend doesn’t have set timeframes for loans to be repaid.

Instead, they’re perpetual, meaning they accrue interest indefinitely until they’re repaid, or until the lender requests a refinancing auction.

If the borrower can’t repay the loan, another lender can take over the loan in the event of a refinancing auction – or in the worst case scenario, a liquidation auction can be run for the original NFT that was loaned against.

Blur burst onto the scene in February this year, offering rewards in the form of tokens to incentivize trading.

This caused a huge increase in NFT trading volume; and since then while the volume across platforms has reduced a bit, it’s still significantly higher than in late 2022.

Based on the resurgence of NFT trading, and with the next bull run in sight, the peer-to-peer NFT trading space may be one to watch!