SNEAK PEEK
- Blur has introduced the expiry-less peer-to-peer NFT perpetual lending protocol Blend.
- The protocol aims to increase liquidity for owners of NFTs.
- The project is a partnership between Blur, Transmissions11 and Dan Robinson .
The NFT marketplace Blur launched Blend, a peer-to-peer perpetual lending protocol developed to support NFT collateral, on May 1.
1/ Introducing Blend: the Peer-to-Peer Perpetual Lending Protocol for NFTs.
Built in collaboration with @danrobinson and @transmissions11 at @paradigm, Blend enables 10x higher yield opportunities than current DeFi protocols and unlocks greater liquidity for NFTs.
Here’s how 👇 pic.twitter.com/uOFC6i3LSq
— Blur (@blur_io) May 1, 2023
Created in partnership with Paradigm, a venture capital company, developers cite the protocol’s rationale as a way of “financialization to scale.”
4/ Every trillion dollar market relies on financialization to scale. NFTs are no different.
Instead of paying $1m for a house, buyers put $100k down and pay the rest through their mortgage. Without this mechanism, almost no one would be able to afford homes. pic.twitter.com/4J96G3pGnJ
— Blur (@blur_io) May 1, 2023
Blend doesn’t have Oracle dependencies and expiries, which enable borrowing positions to open imprecisely until they are stopped. According to developers, Blend will charge zero fees from lenders and borrowers.
The protocol matches users who are interested in borrowing against their NFT collateral with any lender who wishes to provide the most competitive rate upon utilizing an experienced off-chain offer protocol.
For each design, Blend, on its own, rolls a borrowing position as long as a lender is interested in lending that amount against the collateral. There’s no need for any on-chain transactions unless one party decides to leave the position or a change happens in the interest rate.
A permanent lending protocol allows lenders and borrowers to stretch the time of loan expiration by a pre-planned duration by default. When a lender is keen to stop the loan against the wishes of the borrower, an interest-rate “Dutch auction” meant for refinancing is organized, if the borrower hasn’t paid the debt at the time of expiration. The auction starts at 0% refinance interest, with the rate of interest increasing steadily.
Talking about Blend, a non-fungible token may be liquidated when a lender activates a refinancing auction and nobody is interested in taking over the debt at whatever rate of interest.
Developers shared that Blend allows borrowers to repay the loan at any time. If they wish to change the amount borrowed by them or wish to have a better rate of interest, they can opt for a new loan against the collateral, followed by using the new principal as far as repaying the old loan is concerned.
Blur was launched in Q3 of last year and has rewarded users with care packages that can be redeemed since February 14 for BLUR tokens to raise trading activity. Ever since then, the marketplace has gone beyond OpenSea in trading volume.
