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Blur Launches Blend, a P2P Lending Protocol for NFTs with Zero Fees

Blur has recently announced the launch of a new peer-to-peer lending protocol called Blend, which supports non-fungible token (NFT) collateral lending. The platform charges zero fees to both borrowers and lenders, offering market-determined interest rates for indefinite borrowing positions until liquidated.

In partnership with Transmissions11 and Dan Robinson, Blur’s implementation of Blend avoids any oracle dependencies in the core protocol. Interest rates and loan-to-value ratios are determined by whatever terms lenders are willing to offer, and liquidations are triggered by the failure of a Dutch auction.

Blend distinguishes itself from other NFT-backed lending protocols through several design choices that prioritize borrower convenience, gas efficiency, and long-tail collateral support. For instance, the platform supports perpetual loans with no expiries, allowing borrowers to avoid the inconvenience of manually rolling over their positions before expiry.

The platform also adopts a peer-to-peer model that matches individual loans rather than pooling lenders’ funds together, thus avoiding centralized administrators or on-chain governance. Instead, Blend assumes the existence of more sophisticated lenders capable of participating in complex on- and off-chain protocols, evaluating risks, and using their own capital.

Furthermore, Blend allows NFTs to be liquidated whenever a lender triggers a refinancing auction and nobody is willing to take over the debt at any interest rate, mitigating the risk of insolvent positions. By employing a sophisticated off-chain offer protocol, the platform matches users who want to borrow against their non-fungible collateral with whatever lender is willing to offer the most competitive rate.

In their implementation, some protocol parameters, such as protocol fees, are controlled by BLUR governance. Nevertheless, the platform charges zero fees to borrowers and lenders, making it an attractive option for NFT holders looking to borrow against their assets.

Overall, Blend represents a significant contribution to the growing field of NFT-backed lending protocols. Its innovative design choices prioritize borrower convenience and gas efficiency while avoiding centralized administrators and on-chain governance. By allowing indefinite borrowing positions with no expiries, the platform offers borrowers greater flexibility and convenience. The peer-to-peer model and liquidation mechanisms also enhance Blend’s resilience to insolvent positions, making it a robust platform for NFT lending.

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