Note: This article is from @Yuuki_7788 Twitter, which is from the research team of LD Capital. The content of the original tweet is organized by MarsBit as follows:
Regarding the launch of Blend, there are many issues discussed:
1. Currency price: Blend designs an innovative refinancing auction mechanism under the assumption of a rational lender, which realizes many user enhancements such as no external oracle machine feeding price, no maturity date, allowing lenders to withdraw at any time while protecting the interests of borrowers, etc. The function of experience, but why the currency price of BLUR is sluggish? Perhaps there are two reasons:
1. The current valuation gap between the NFT lending track and the NFT trading platform track is huge. From the perspective of MC: the current Blur MC is 290 million, while the previous leading NFT lending agreement bend dao MC is only 6.3 million and Jpegd MC is only 13.52 million. There is an order of magnitude gap. Even if Blur stabilizes its leading position in NFT lending, the contribution of NFT lending business to its market value will be very limited.
2. TVL has risen rapidly since the launch of Blend products. From the perspective of outstanding loans, Blend has been online for two days, and the current outstanding loans are 16.58 million US dollars, reaching 73% of bend dao.
But while Blend's business is expanding so rapidly, the TVL of Bend Dao, Jpegd and Paraspace has not declined. From this point of view, as for Blend, as for the NFT lending market, Blend creates demand through point incentives, which is essentially an agreement expenditure, rather than promoting Blend’s business development and generating profits based on real lending needs.
To sum up, the launch of Blend products is an elephant and ants vying for the market, and it is still burning money to rob the market. (The reasons for the abnormal valuation of NFT trading platforms and NFT lending products are not analyzed here, and only the objective data of the current market are stated)
2. Since the launch of Blur, there has been a continuous decline in the floor price of blue-chip NFT due to the sufficient Liquidity it has provided to make NFT "value return". What impact will the launch of Blend have on the floor price of NFT? The essence of lending products is a tool for long asset prices. Bull market plus leverage, and bear market can also be used as an alternative Liquidity exit channel. From this perspective, the launch of Blend should boost the rise of NFT prices.
3. The impact of the launch of Blend on other NFT lending agreements? Currently, Blend uses the Liquidity in the bid pool combined with point incentives to provide sufficient Liquidity on the loan side. For borrowers, Blend is currently the product with the highest LTV and the lowest borrowing rate. After the launch of Blend, the rapid decline in the prices of Bend and Jpeg also reflected this impact.
(But be wary that most lenders may be motivated by swiping Blur points. The amount of funds on the real loan side is insufficient. The borrower’s collateral is frequently initiated by the lender for refinancing auctions, resulting in the borrower’s real borrowing rate being too high, or NFT liquidated to generate losses)
Special Note: Blur will unlock 200 million Tokens in a large amount on June 14, accounting for 42.9% of the current circulation
