The market for non-fungible tokens On Monday, Blur announced the debut of a new loan platform that is centered on NFTs and functions without expirations and without relying on any external price oracles, similar to how existing lending platforms function.
A lawyer Dan Robinson, a lawyer and researcher at crypto investments firm Paradigm and one of the primary backers of the project, introduced the new lending platform on Twitter and in a detailed whitepaper. Robinson said about the project that it “support arbitrary collateral, has no oracles, and has no expirations.”
Robinson’s whitepaper states that Blend deviates from conventional lending procedures in that it enables borrowing positions to be open for an unlimited amount of time and use interest rates that are determined by the market.
According to the whitepaper, “Blend matches users who need to borrow against their non-fungible collateral with whatever lender is willings to offer the most competitive rate by using a sophisticated off-chain offer protocol.” Blend is a decentralized lending platform that allows users to borrow against their non-fungible collateral.
It was also stated that by default, Blend loans would have fixed interest rates and would never reach their maturity date.
“Lenders can exit their positions at any time by triggering a Dutch auctions to find a new lender at a new rate, while borrowers have the ability to repay the loan at any time.” In the event that the auction is unsuccessful, the whitepaper explains that the borrower would be liquidated, and the lender would take custody of the asset.
Robinson’s introduction is consistent with what the Blur team said about the new platform on Twitter. In that post, the Blur team referred to it as a means of liberating the liquidity of NFTs.
On their Twitter thread, the team explained that buyers of NFTs face the same problems as home buyers in that very few people are able to pay the full price upfront, whether they are purchasing a house or a top NFT collection. This is a problem that affects both types of purchases.
“A lot of people might be interested in buying into a collection, but only a very small percentage of them have the financial means to do so.” NFT lending is the solution,” the Blur team noted in their explanation.
Punks, Azukis, and Miladys, are the three most popular NFT collections that are now accepted as collateral by the protocol. The development team mentioned in a later launch thread that additional collections will be included “soon.”
Items from these collections can now be used as collateral to borrow ETH, thanks to the new protocol. Alternatively, an investor can just buy an item from one of the collections today and pay it down later on in the form of ETH payments.
“[…] if you want to assume complete ownership of your NFT, you can repay the money that you borrowed at any time. Or, you can list your NFT whenever you like and keep any profit you make when you sell it, as the team explained in their post.
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