Blur, the leading non-fungible token (NFT) marketplace, announced on Monday the launch of a new peer-to-peer lending protocol called Blend, aiming to maximize NFT liquidity. The new move also focuses on making high-value collections, such as Bored Ape Yacht Club and CryptoPunk NFTs, more accessible to potential buyers who were previously priced out of the market.
The platform announced officially on its Twitter page the launch of Blend:
1/ Introducing Blend: the Peer-to-Peer Perpetual Lending Protocol for NFTs.
— Blur (@blur_io) May 1, 2023
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
Significantly, Blend, short for Blur Lending, has been designed to enable collectors to finance NFT purchases by putting up a percentage of the full price as collateral, similar to a down payment on a property followed by mortgage payments. The introduction of the Blend platform is expected to open up new opportunities for both lenders and borrowers looking to enter the NFT market.
Notably, the Blur asserted on a Twitter post that NFT lending would focus on making NFT accessible and affordable for all, stating:
Every trillion dollar market relies on financialization to scale. Many may want to buy into a collection, but very few can afford to pay it all at once. The solution is NFT lending.
It is noteworthy that the project collaborated with Dan Robinson, Head of Research at venture capital firm Paradigm, and pseudonymous research associate Transmissions to develop the Blend platform; Paradigm is also the lead investor in Blur.
The Blend white paper revealed that the platform would not charge fees to traders or lenders, further expanding Blur’s presence in the decentralized finance (DeFi) space. Per the whitepaper, Blend is defined as a “flexible and permissionless floating-rate lending protocol” that could support any collateral without relying on an oracle and allows whatever interest rates and loan-to-value ratios the market will bear.
Furthermore, the protocol allows for perpetual lending, meaning loans could remain open indefinitely until liquidated, with interest rates determined by the market. Borrowers would be able to repay loans at any time, while lenders have the option to initiate a Dutch auction to find a new lender at a new rate. If the auction is unsuccessful, the borrower’s assets are liquidated, and the lender takes ownership of the collateral.
Meanwhile, Dune Analytics reported that while Blur has been the dominant NFT marketplace for the previous few months, total NFT trade volumes have fallen in recent weeks.
