TL;DR
-
Blend allows you to take out a loan for your NFTs, giving you access to cash that you can then reinvest or spend on whatever you want.
-
Meanwhile, liquidity providers earn interest by lending ETH, with the NFT serving as collateral.
-
If the borrower is unable to repay the loan, another lender may take over the loan in the event of a refinance auction – or in the worst case, a liquidation auction may be held for the original NFT that was borrowed against.
-
Based on the resurgence of NFT trading, and with the next bull run in sight, the peer-to-peer NFT trading space may be one to watch!
Full story
Things become is called in the NFT lending room.
Loans backed by NFT ownership recently topped $1 billion USD, with lending protocol NFTfi facilitating more than $406 million in loans to date. BendDAO is the second highest valued at about $308 million, according to Dune data.
And it gets hot hotter 
The number one (by trading volume) NFT marketplace, Blur, has just released a new peer-to-peer lending protocol called ‘to blend.’
This is how it works:
Imagine owning a few valuable NFTs.
Blend allows you to take out a loan for your NFTs, giving you access to cash that you can then reinvest or spend on whatever you want.
Meanwhile, the people holding the money earn interest by lending out ETH, with the NFT serving as collateral.
And it’s all peer-to-peer (no intermediary).
Where Blend differs from some of the other lending protocols is that Blend has no set timeframes for loan repayments.
Instead, they are perpetual, meaning they accrue interest indefinitely until they are repaid or until the lender calls for a refinance auction.
If the borrower is unable to repay the loan, another lender may take over the loan in the event of a refinance auction – or in the worst case, a liquidation auction may be held for the original NFT that was borrowed against.
Blur came on the scene in February this year, offering rewards in the form of tokens to boost trading.
This caused a massive increase in NFT trading volume; and since then the volume has declined slightly on various platforms, but it is still significantly higher than at the end of 2022.
Based on the resurgence of NFT trading, and with the next bull run in sight, the peer-to-peer NFT trading space may be one to watch!
