Improving liquidity of NFTs
NFT (non-fungible token) electronic market for professional traders “Blur” announced on the 1st, P2P perpetual lending protocol “Blend” for NFT.
Blend was developed with employees of Paradigm, a major venture capital firm that invests in Blur. The purpose of Blend is to provide new lending services, create opportunities to earn interest rates 10 times higher than existing DeFi (decentralized finance), and improve the liquidity of NFTs.
1/ Introducing Blend: the Peer-to-Peer Perpetual Lending Protocol for NFTs.
Here’s how 👇 pic.twitter.com/uOFC6i3LSq
—Blur (@blur_io) May 1, 2023
What is Blur
NFT electronic marketplace for professional traders. After its launch in October 2022, it has grown rapidly by acquiring traders with its zero-fee service and high-speed aggregation model.
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The name Blend stands for “Blur Lending”. Users can borrow crypto assets (virtual currency) by depositing any collateral such as NFT. According to the white paper, Blend acts as a match between “borrowers who deposit non-fungible collateral” and “lenders who offer competitive interest rates.”
One of the reasons for developing Blend is the soaring price of the popular NFT collection. For example, when buying a house, the buyer usually pays a part of the amount first and pays the rest with a loan, but Blend realized this purchase method with NFT.
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The whitepaper explains that Blend will be developed in stages. He said that he would first provide fixed-rate lending services and then gradually expand to support variable interest rates.
The structure of the fixed interest rate loan service is summarized in the white paper as follows.
- Users who want to lend a certain amount of Ethereum (ETH) set an interest rate and offer to trade off-chain.
- Offer selected by borrower collateralized by NFT collection.
- Deposit NFT collateral and transfer Ethereum on-chain.
- If the lender wants to end the transaction, they can continue the position by conducting a Dutch auction to find another lender.
- If the auction fails and the lender does not take over, send the collateral to the lender.
After making this announcement, Blur announced that Blend had actually launched. First of all, it corresponded to the three NFT collections in the following tweets. For example, if you own a CryptoPunks NFT, you can borrow up to 42 ETH (equivalent to 10.5 million yen).
2/ Blend is launching with 3 collections at 3 different price points to start:
More are coming soon. pic.twitter.com/6vmqDRK1DT
— Blur (@blur_io) May 1, 2023
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