Here's How Blend Wants to Unlock Liquidity for NFT Holders

Transcript

let's say you have a board ape and you want to borrow ten thousand dollars you would normally have to set a specific duration like oh I want to borrow ten thousand dollars for two weeks and then you have to you know set a reminder for two weeks later to repay your borrow otherwise you'll lose your you know 100 000 board ape and then in blend is actually a Perpetual lending protocol so there's no explicit expiration so you can just borrow ten thousand dollars that borrow keeps on accruing interest over time but you don't have any explicit time at which you have to repay your borrow so you're going to launch a new product called blend what is blend in a short sentence blend is a peer-to-peer Perpetual lending protocol for nfds if

you're familiar with like D5 protocols like compound and Ave those are peer to pool where everyone just kind of dumps some Ethan crypto into a pool and then the protocol handles out the loans and blend it's peer-to-peer so each loan is basically issued by like a separate individual and then the borrower when they take a loan they take it from a separate individual it's not borrowing against a pool it's borrowing against like an individual loan offer as a fund so it's a peer-to-peer versus peer-to-pool model so why is it that blur decided to launch nft borrowing right now in nfts there's pretty much no financialization so you know there's billions of dollars worth of entities trading every month but there's

absolutely no you know pretty much zero financialization at all if you look at most financialized markets like the housing market or the crypto Market you know every Big Market grows through financialization so even if you look at like Bitcoin for example uh 90 of Bitcoin volume is from derivative volume it's not from you know spot volume similarly in the housing market it's you know the majority when people buy their houses they buy it with a mortgage they don't pay all the money up front and nfts today we're still at the very early stage of this Market where there isn't any sort of financialization and let's say that I have like one valuable nft like aboard eight but then the rest are

kind of you know sort of like middle level then how am I vetted and how do I vet who my lender is or or do I not do that is it just yeah so you don't actually even need to vet the lender the way it works is currently you know in the initial implementation all of the loans are collection Loan offers so basically you borrow anyone from that has like a board app as an example could borrow using any of the loans it's not like against specific traits or specific nfts and when you borrow you basically will just you know take out like a certain amount of beef you have to lock up your nft you

take out a certain amount of heat and then once you have that eat now your borrow balance like let's say you borrowed like 10 feet now your borrow balance starts accruing interest and eventually eventually when you want to repay that borrow you have to repay that borrow plus interest is it like other kinds of borrowing in crypto where there's collateralization ratios nfus are so illiquid you can't just kind of copy paste the exact same Primitives that have worked in Deep by over to nfts so the way the protocol works is there's actually no collateralization ratio there's no Oracle system uh this also means that the protocol is does not

suffer from the same like oracle-based attacks that most normal lending protocols and both like EFI and nfts have kind of suffered from and the way it works is that when the lender doesn't want to loan anymore let's say they want to get their eat back at that point the lender can basically initiate an auction where the borrower gets to repay their loan within 30 hours and if they don't repay their loan then the the loan basically goes through an auction where the interest rate increases from a zero percent apy all the way up to a thousand percent apy and basically if any other lender sees that and is like oh actually this 10-8 loan

at 10 apy is not very appealing but actually at 25 apy is very appealing to loan against given my risk profile then another lender can come in and basically refinance alone automatically for you so this mechanism basically allows you to have uh this like peer-to-peer Landing mechanism without having to rely on an oracle system [Music]