NFT marketplace Blur on Monday launched a new NFT-focused lending platform that operates without expiry and no external price prediction like other lending platforms.
The new lending platform was introduced on Twitter and Dan Robinson, a lawyer and a researcher at crypto investment firm Paradigm and one of the project’s main backers, said about the project in a detailed whitepaper that it “supports arbitrary collateral”. does, it has no oracles, and it has no end.
According to Robinson’s whitepaper, Blend differs from traditional lending protocols by allowing borrowing positions to be kept open indefinitely with market-based interest rates.
“It matches users who want to borrow against their non-replaceable collateral with whichever lender is willing to offer the most competitive rate using a sophisticated off-chain offer protocol,” the white paper states.
It states that by default, the interest rates on blend loans are fixed and will never expire.
“Borrowers can repay at any time, while lenders can exit their positions by triggering a Dutch auction to find a new lender at a new rate. If that auction fails, the borrower is liquidated and The lender takes possession of the collateral,” the whitepaper explained.
Unlocking the Liquidity of NFTs
Robinson’s introduction matches what the Blur team wrote about the new platform on Twitter, where it described it as a way to unlock the liquidity of NFTs.
The team explained in its Twitter thread that buyers of NFTs face the same problem as home buyers, in that few people are able to pay full price, whether to buy a home or a top-of-the-line collection of NFTs.
“Many people want to buy in a collection, but very few can pay it all at once. The solution is NFT lending,” wrote the Blur team.
The team later added in a launch thread that for now the protocol accepts three popular NFT collections Punks, Azukis and Miladys as collateral, with more to be added “soon”.
Using the new protocol, items from these collections can now be used as collateral to borrow on ETH, or an investor can buy an item from one of the collections now and pay for it later .
,[…] You can repay your loan at any time to take full ownership of your NFT. Or, list your NFTs at any time and keep any profits when you sell,” the team wrote.