NFT loan volume soars to $67M as mix leads price with CoinEdition
- NFT loan transaction volume hits a six-month high of $67 million, with Blend taking 75% of the market share.
- Blend’s introduction correlates with a short-term increase in the floor prices of prominent NFT pools, according to data from OpenSea.
- Critics argue that NFT lending platforms such as Blend can create liquidity risk.
According to Dune analytics data, the non-fungible token (NFT) lending market witnessed a significant increase last week, with transaction volume exceeding $67 million, a new high in the past six months. The recently launched lending protocol, Blend, accounted for almost 75% of the total loan volume.
Blend, a product of NFT Marketplace Blur, was introduced on May 4 and has since garnered significant attention in the industry. It is a unique peer-to-peer perpetual lending protocol that enables borrowers to use their NFTs as collateral without term limits.
Developed by Paradigm in partnership with Blur, the platform aims to match borrowers who have non-fungible collateral with lenders willing to offer the most competitive rates. Loans facilitated by Blend have fixed interest rates with no expiry dates and are governed by protocol fees controlled by Blur.
The lending platform differs from other protocols by matching each loan individually instead of pooling lenders’ funds. This approach supports long-tail security, allowing lenders to participate in the complex on- and off-chain protocols and evaluate risks.
Meanwhile, data from NFT marketplace OpenSea suggests that Blend’s introduction may have contributed to a short-term increase in the floor prices of some blue-chip NFT pools. For example, since May 1st, the floor price of the popular Bored Ape Yacht Club collection has risen from 47 ETH (about $93,500) to about 50 ETH ($99,400). Similarly, the floor price of Mutant Ape Yacht Club increased from approximately 10.5 ETH ($20,900) to 11 ETH ($21,900).
Despite the positive impact on the NFT market, critics argue that NFT lending platforms like Blend can create liquidity risk if collectors buy tokens with funds they don’t have. The potential for market fluctuations and cryptocurrency price collapses adds to these concerns.
The post NFT Loan Volume skyrockets to $67 Million as Blend Leads the Charge appeared first on Coin Edition.
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