You can now use your JPEGs to borrow Ethereum on the NFT Marketplace Blur
The The NFT-backed loan market is gaining momentumwith total loan value to date recently topping $1 billion across various protocols – and now the current largest Ethereum NFT marketplace by trading volume is also in on the action.
Today the NFT marketplace announced Blur the creation of Blend, a peer-to-peer perpetual lending protocol based on NFT assets. Short for “Blur Lending”, Blend allows NFT collectors to borrow against their existing assets, and also allows liquidity providers to earn interest by lending ETH with NFT as collateral.
Unlike some lending protocols, Blend does not have set time frames for repaying loans. Instead, they are perpetual, meaning they continue to accrue interest until they are repaid, or until the lender triggers a refinancing auction. This means that another lender can take over the loan if desired, otherwise a liquidation auction can be triggered for the NFT security.
Furthermore, the loans are not dependent on oracles or external data sources outside the chain. This means that a loan on Blend will not look at NFT price data across marketplaces, which is used by some lending protocols (such as BendDAO) to determine liquidation criteria.
In a tweet thread, Blur wrote that Blend “enables 10x higher return opportunities than current DeFi protocols and unlocks greater liquidity for NFTs.” Blend currently has no fees for borrowers or lenders, but BLUR token holders can vote to enable fees after 180 days.
Blur teased in a tweet thread that it will launch two “major new products” today built around Blend. Full details of how the protocol works are listed in the official white paper.
The protocol was built in collaboration with Dan Robinson and the pseudonymous Transmissions11 of crypto venture capital firm Paradigm, who led Blur’s own $11 million funding round back in March 2022.
Blur launched last fall as an upstart rival to then-leading NFT marketplace OpenSea, with plans to offer token rewards to incentivize traders. The platform took the lead in the NFT space in terms of total trading volume this February following Blur’s first token airdropas high-volume traders quickly turned over assets to earn BLUR token allocations.
While the trade hype has died down since February, Blur remains on top in terms of trade volume.
Over the past week, Blur has commanded around 58% of NFT trading volume across marketplaces, per data from Dune, racking up $98.5 million worth of trades. However, OpenSea still leads in terms of total trades, with approximately 47% share via nearly 80,000 trades.
The NFT lending market recently topped $1 billion and continues to grow, with lending protocol NFTfi led the charge with over $406 million worth of loans to date. BendDAO is number two with a value of around 308 million dollars, as of data from Dune.
