Blur, the NFT aggregator and marketplace, has announced Blend, a "Peer-to-Peer Perpetual Lending Protocol for NFTs." Blur says it's partnering with investors, including Dan Robinson (a Uniswap V3 co-founder) and @transmissions11, a researcher at Paradigm, to bring the initiative to fruition.
The new product will allow NFT holders to put up their current holdings for collateral and deposit lesser upfront for expensive NFTs like CryptoPunks.
For instance, you could deposit 2 Eth for a CryptoPunks NFT worth 55 Eth floor and pay in bits. This is like paying to mortgage a house at 3% of the original price.
In another instance, you can put up a highly valued NFT as collateral to get a loan in Eth, allowing you to liquidate your assets without selling your actual holdings.
According to the product's Whitepaper, it will operate a peer-to-peer non-expiring lending mechanism. "Blend matches users who want to borrow against their non-fungible collateral with whatever lender is willing to offer the most competitive rate, using a sophisticated off-chain offer protocol."
Borrowers can repay at any time, with lenders having the flexibility to exit positions whenever they like.
Once a lender exits their position, they trigger a Dutch auction to find a new borrower at a better rate. If the auction fails, they take possession of their collateral, and the borrower gets liquidated.
The product launched moments after announcing the same via its Twitter handle. However, the aggregator handler says it's starting with three collections; Punks, Azuki, and Milady—with more NFT collections coming aboard soon.
Blur's initiative isn't the first of its kind. Other NFT lending platforms, including NFTfi, Arcade, and Nexo, offers peer-to-peer NFT lending for notable collections. But it's impressive to see all NFT-related utilities in one place.