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Dear country without banks
This week’s topic is Blur’s latest release, Blend.
Blend is a new type of NFT lending protocol with great potential and big risk.
So, in today’s post, let’s take a closer look at the basics of this platform and why it’s causing so much controversy!
-WMP
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Designed by Paradigm researchers and implemented by Blur, Blend is a new peer-to-peer lending protocol that allows users to borrow ETH against NFTs.
Blend is unlike any lending protocol the ‘NFTfi’ sector has seen so far, as it has no Oracle dependencies and No expiration date. This design means that borrowing positions remain open indefinitely until repaid or liquidated, with interest rates determined by the market.
Unlike on-chain peer-to-pool lending formats, e.g. Ben Dao, users looking to borrow against NFTs on Blend will be matched with lenders offering the most competitive rates through our off-chain offer protocol. Borrowers have the flexibility to repay whenever they want, and lenders can opt out of their positions by starting a Dutch auction to find an alternative lender at a different rate. If the auction fails, the borrower will be liquidated and the collateral transferred to the lender’s title.
For a deeper dive into Blend’s inner workings, see: New protocol whitepaper and this wonderful primer thread Dan Robinson of Paradigm.
Blur implemented the Blend design to bring two new products to life on its platform. Borrowing and Buy Now Pay Later (BNPL).
These new products will soon support three initial collections. CryptoPunks, Azuki, Milady Maker — More collections will be integrated in the future.
The borrowing feature allows owners of these collections to quickly borrow ETH for NFTs without having to sell the underlying digital collectibles. Conversely, the BNPL feature is a mortgage-like system that allows a user to purchase her NFTs up front and use a blended borrowing position that must be paid back over time to cover the rest.
Another aspect of the Blend Borrowing product is, of course, borrowing.
Expanding here, lending ETH on Blend earns yields and lending points on the Blur platform. A previous user created by depositing funds into her Blur Pool wallet, bid You can now also apply for loans on the platform using your Blur Pool funds.
First, the lender can access the[ローン]Click a tab. Then choose the maximum amount of ETH you can borrow using a single NFT, the higher the “Max Borrow” value, the more points you earn. Then select her desired APY for the loan and complete the offer.
Once the borrower accepts the loan offer, the NFT will be locked and the lender will start earning interest on ETH. The loan can be closed at any time to charge ETH and interest, and the borrower can repay the loan within her 30 hours or refinance it with another offer. If not, the lender will receive her NFT.
according to blur loan dune dashboard beetlethe newly launched blend is off to a fast start with +9,700 of total ETH loaned, already facilitating +900 loans. Total loan total was +5,600 ETH.
• Blend positions Blur as a dominant and growing force in the NFTfi category, thanks to its large user base and $BLUR incentives.
• Blend further strengthens Blur’s position as a force to be reckoned with in its ongoing rivalry with NFT marketplace giant OpenSea.
• Blending brings additional utility to the $BLUR token as parameters and fees are controlled by $BLUR governance.
• Blend has a revolutionary “no oracle” design, potentially influencing a new wave of NFT protocols to explore and experiment with avoiding oracle dependencies.
Of course, many NFT users are not DeFi power users and do not have a firm grasp of the basic mechanics of borrowing and do not understand the leverage and liquidation risks.
So on the one hand, Blur continues to overfund the NFT space using Blend,gambling economyOn the flip side, some have expressed concern that regular users who don’t need to mess around with more sophisticated NFTfi products such as NFT mortgages may be lured into these new offerings and get burned.
That said, I think it’s good to understand the basics of Blend and its context in the modern ETH ecosystem. It is important to note that Advanced NFTfi UserLikewise, watching from the sidelines is a perfectly good strategy for the majority of us right now.
Blend is very interesting in the context of designing mechanisms and expanding the frontiers of the NFTfi sector. There may even be more of his DeFi projects exploring things like “no oracle” designs. But it’s important to emphasize that unlike his more basic NFT offerings, Blend is risky and not for everyone. wake up.
if you that is If you want to try Blend directly, treat it as an experiment and proceed with caution after fully understanding the intricacies of the system.
William M. Peester is a professional writer and creator of metaversal— Bankless newsletter focused on the emergence of NFTs in the crypto economy. Recently, we also provide content to Bankless, JPG, etc.
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