New Crypto Lender Blend
Blend is a new crypto lending platform that comes from the creators of NFT marketplace Blur. It is possible for users to deposit NFTs as an attachment to a loan. In a very short time, the new project takes the lead in the niche market.
How the new crypto lender is conquering the market
The NFT marketplace Blur already caused a stir when it launched in late 2022. The inventors of the popular market recently published their latest project. It is called Blend and is intended to serve crypto lending.
However, unlike traditional platforms like Aave or centralized services like Celsius or BlockFi, Blend is not just about exchanging fungible cryptocurrencies. Instead of digital currencies, NFTs can be deposited as collateral on Blend.
The lender must agree with the borrower on the estimated value of the non-fungible token and an interest rate. The lender then transfers funds to the borrower, who then entrusts their NFT to Blend accordingly.
There it is included in a smart contract and can be uncovered by the borrower by paying back the borrowed funds. Blend does not specify a fixed period for this. The project’s white paper states:
Blend automatically rolls up a loan position as long as a lender is willing to lend that amount against the collateral.
Whether liquidation takes place at all depends on whether a new lender can be found or not. If the lender wants their money back, they can initiate a process that Blend calls a Dutch auction .
A certain price is assigned to the NFT, which falls over time. Then a new lender can step in and provide a new loan amount. If no such user is found, the original sponsor can take over the NFT.
Blend itself is already enjoying success after just a few hours. According to their own statements, they are already the largest NFT lending platform on the market in terms of credit volume.
NFT-Lender Blend sparks controversy
Blend itself says it can help the NFT market by providing peer-to-peer lending. The developers compare the NFT market with the real estate market. The prices for interesting objects are so high that it is hardly possible to get in without a loan.
Users who already own a valuable NFT can use it as collateral to make further purchases without having to sell their first NFT.
At the same time, Blend allows its users to buy an expensive NFT for little money and pay the promised balance at a later date. However, the digital certificate will not be released until the price has been paid in full.
The NFT-Lender currently only supports three collections – Azukis, CryptoPunks and Milady Maker. They are all on Ethereum.
However, the new platform is causing controversy among NFT enthusiasts . Instead of a benefit, one fears an artificial inflation of prices. Because it is no longer necessary to sell an artwork to raise capital, prices could continue to rise.
Blend is now the #1 market manipulation tool and predatory lending protocol. Its founders are 25x more likely to get the most out of users while damaging the NFT market!
If a user comments and receives approval for it. Currently, however, Blend does not charge its users any fees . Only in half a year will holders of the BLUR token be able to set fees.