When an item has a "value" through market consensus, it is very intuitive to be designed as a loan collateral. Therefore, the track of the NFT lending agreement has developed earlier than other NFTfi topics, and there are already p2p peer-to-peer For NFTFi, the customer base is all NFT projects, which are handed over to the users themselves, but they face the problem of capital efficiency. In addition, BendDAO, designed as a p2pool peer-to-peer pool, aimed at blue chips or "formerly" blue chips to solve the problem of capital efficiency, but BendDAO also faced a death spiral in August last year, and the pool was even drained for a while. Fortunately, it came back to life afterwards.
What kind of new concept can Blend, launched by Blur, the NFT trading platform with the largest trading volume, bring to this typical track with more wolves and less meat?
The meaning of "no oracle" behind Blend
In the peer-to-peer lending mechanism, there is no meaning for the oracle of the floor price . Users of both lenders and borrowers only need to know the floor price in the NFT trading market, or use the Upshot oracle as a reference. After all, NFTs of different rarities have no absolute objective value, and each transaction is an independent risk pool.
In the peer-to-peer pool, the floor price oracle machine is extremely important. In addition to the collateral ratio (ex: how much ETH can be obtained by mortgaging an NFT), it is also related to the start of the liquidation mechanism. In order to improve the efficiency of funds, the oracle machine The role of NFT allows every NFT holder to obtain funds clearly and quickly after entering the agreement, and it can also ensure that the collateral enters the auction and liquidation mechanism smoothly every time NFT encounters a rapid price drop.
Blend leaves the oracle price feeding mechanism in the agreement to the market to decide, and combines the two concepts of point-to-point and point-to-pool, taking Azuki as an example:
- Point-to-point flexibility: It is realized by each lender throwing his own offer into the sight of Azuki holders. Each offer point uses color to show the degree of competition. It aggregates the offers of all lenders and presents them in a graph.
- Point-to-pool Liquidity: Because any Azuki can accept existing offers, users will not see offers that are higher than the floor price. All Azuki are floors. This collateral processing method is not based on rarity , which is the concept of point-to-pool.
The sell-off of giant whales will not trigger a mechanical liquidation
It is not uncommon for a series of liquidation incidents to break out in the peer-to-peer pool agreement. I still remember that after the Azuki founder participated in the Rug project incident, the floor price of Azuki plummeted by 50%, which caused the chain effect of Azuki’s tragic liquidation in the BendDAO agreement; Look, a large hourly sell-off "may" not cause chain liquidation, because all lenders must exit by consensus before chain liquidation can be initiated.
Further reading: The founder of Azuki revealed that he had operated 3 NFT projects before, but was refuted by the satirical rug; the floor price plummeted by nearly 40%
So from last year, BAYC giant whale Franklin used Blur at a price below the floor price, and placed a large number of BAYC to try to influence the market price, or Maji’s big brother Huang Licheng sold a large number of 137 boring apes on Blur on February 24. This giant whale smashed through the floor, The possibility of triggering the liquidation mechanism of the lending agreement has been reduced after the emergence of Blend. The main reason is that each lender user can make judgments about the future ups and downs of the project, and the other borrower can raise funds through re-auction and match with different lenders again.
Further reading: BAYC floor price has fallen below 50ETH! Giant whales try to set low prices to trigger liquidation
Competitiveness of "leveraged Bullish and Bearish"
In the past peer-to-peer lending agreement nftfi, the establishment of a loan transaction is often interpreted as a "gambling contract" between the borrower and the lender, or a Bullish or Bearish option for NFT.
For example, the lender (the person who lends ETH ) is Bullish on the NFT in the future, and expects the borrower (the person who borrows ETH ) to fail to repay. Not only can he obtain the NFT at a price lower than the floor price in the future, but he can also earn interest income . On the other hand, if the borrower is Bearish on the NFT, he can not only lend ETH, but also directly choose not to repay, so as to obtain instant Liquidity. For the same peer-to-peer lending protocol, Blend also has the same characteristics, but its liquidation mechanism is perpetual .
In addition, the concept of buying NFT with loans in Blend is equivalent to leverage to see long NFT. For players who want to play NFT perpetual contract with low threshold, it is another option besides nftperp. This perpetual contract packaged in transactions Compared with the complex mechanism behind nftperp, this feeling is more intuitive and simple.
epilogue
Recalling the death spiral of BendDAO in August last year, the founder of BendDAO mentioned, "When designing the model of BendDAO, most of the details were referred to the AAVE point-to-pool Defi model, and the difference in the Liquidity of NFT was not too deep. research", and thus experienced the crisis of the flow pool being drained.
Today, the design details of Blend can be seen to have many innovations. After going through the iteration of the entire loan agreement project, it combines peer-to-peer and peer-to-pool, and combines lending and leverage. If you disassemble the functions, you can indeed see more figure of the project.
Just like when Blur was launched, it aggregated multiple functions in the trading experience. For pro-traders, it instantly saved the monthly fee or pass fee for professional tools. I think that no matter how much market share Blend will gain in the future, its The comprehensive functions have indeed solved the pain points on this track.
After Blend went online, in addition to seeing an astonishing amount of loans , it is worth mentioning that many users who borrowed money to buy NFT listed NFT at a price higher than the floor price in order to avoid being liquidated. The floor price of NFT's NFT continues to rise, and the market speculates that Blend's NFT that will be launched in the future will also rise together. A big bubble with a bar?
