Blur’s NFTfi Platform ‘Blend’ Surpasses 1000 ETH in Total NFT Sales Volume

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Blur’s NFTfi Platform ‘Blend’ Surpasses 1000 ETH in Total NFT Sales Volume

By RoryKeyz

The dawn of May saw NFT disruptor Blur take on a new challenge by of entering the emerging ‘NFTfi’ market.

In essence, what this entailed was the launch of a new liquidity ‘lending’ protocol for NFT purchases called ‘Blend’- which, in its 3rd full week of activity, has facilitated over 1000 ETH worth of NFT trades.

The Blend Platform

The ‘Peer-to-Peer Perpetual Lending Protocol’ of Blend- which is a play on words for ‘Blur Lending’- is focused on NFTs of the Blue-Chip variety, and how before its inception, they’ve largely been unattainable for most collectors.

In making matters easy - and in abiding by its focus of staying ‘intuitive for borrowers, and safe and flexible for lenders’- the Blend system is similar to that of house mortgages or car finance options. This is because it simply asks traders to pay a percentage of the full NFT price as a down payment, with the remaining balance to then be paid in increments over time (with loans being issued in ETH).

Of course, such dynamic cannot be completed without some form of collateral in play, which, in this instance, can be traders’ NFTs. As is also familiar to us all, Blend liquidity providers earn interest for their services. Collectively, all of these mechanisms are helping cultivate a new area of DeFi called ‘NFTfi’.

Examples of the platform in action (given by Blur itself) include CryptoPunk owners being able to borrow up to 42 ETH within seconds, or those wanting to buy an Azuki being able to do so through making a (relatively minuscule) 2 ETH down payment.

For added context, Blue-Chip collections Azuki, Wrapped CryptoPunks, DeGods, and Miladys were the initial projects to be made available on Blend, before Bored Ape Yacht Club (BAYC) and Mutant Ape Yacht Club (MAYC) were added on Monday May 15th.

As Blur puts it, ‘without this mechanism, almost no one would be able to afford homes’- which, as Blend showcases, can also be applied to the slightly smaller domain of NFTs. This is because without the Blend offering more access to liquidity, Blue-Chip assets can’t be democratised to those who want them the most.

In further explaining the rationale behind the new platform, Blur refers to the mass potential of the NFT market, and how it needs NFTfi support in order to reach its full output:

“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”.

The platform also alludes to the ‘explosion’ of the token markets after the introduction of ‘stronger financial primitives,’ and how it’s now time for ‘NFT-native primitives’ to ‘jump start the next stage of growth for the NFT market’.

When it comes to the platform’s details, it was created in collaboration with the head of research at venture capital (VC) firm Paradigm Dan Robinson, as well as his pseudonymous research associate ‘Transmissions’. For context, Paradigm is the lead investor in Blur.

As of now, Blend issues zero fees to both traders and lenders, however similar to policies of Blur, fees may make an appearance after 180 days (if a $BLUR token holder vote decides so).

NFT marketplace X2Y2, BendDAO, and namesake entity NFTfi serve as the major rivals to Blend, however per insight from Blend, the new kid on the block enables 10-times higher yield opportunities than current DeFi procotols.

Performance

Making the headlines this week was the platform’s relentless performance since its launch on May 1st, as earlier this week it hit the 1000 ETH (around $181 million) milestone when it comes to NFT sales (volume wise).

Intuitively, this Dune-provided stat has the potential to add a hint of optimism to the NFT trading space, as not only does it indicate that NFTs are still somewhat sought-after during these treacherous times, but also that NFTfi mechanics may have the ability to become a partial saviour of the industry (if used correctly that is).

On the stats end of things, the 100,000 ETH worth of NFT sales were made through Blend dishing-out over 3000 loans from 900 unique lenders- where despite the likes of BAYC and MAYC MAYC joining the scene earlier this week, collector bullishness for Azuki- i.e., a relatively more affordable collection- has remained the most rampant over the last few days and weeks.

On the Blur-specific side of things, Blend comes as the NFT marketplace nears-on the end of its Season 2- i.e., the period wherein $300 million of its native $BLUR is being distributed to users.

With such endeavour in action, further stats from Dune show that the platform has kept its place as the number one NFT marketplace over the past few months- where in doing so, it has facilitated almost double the amount of NFT trades than its main competitor OpenSea (in terms of ETH sales volume).

NFTfi & the Wider NFT Economy

The aforementioned stats essentially demonstrate how Blend and its fellow NFTfi platforms can encourage more NFT trade activity through providing more liquidity to traders. As economics would suggest, this is basically the case in literally every other economic market, as with barriers to entry lessened, more traders are able to join the antics and begin acquiring assets that they were previously priced-out of.

As economics may suggest even further, with demand now on the up due to more liquidity on offer, sales and therefore prices may also follow suit. Of course, such circumstance bodes very well for those waiting for the crypto and NFT winter to finally end.

That being said, such periods of bearishness are far more complex that simply being a matter of there being ‘a lack of liquidity for NFT purchases purposes’- which means that in reality, we shouldn’t be getting too excited with the addition of NFTfi into DeFi proceedings.

In addition, NFTfi is still a very nascent area of tech and tokeeconomics, so again, unilateral support for the space should only really come once (or if) it proves itself as an astute, reliable, and (most importantly) sustainable method for driving bullishness amongst traders.

To read the Blend whitepaper in full, visit this link.

Article by RoryKeyz