Paradigm and Blur Developers Announce Blend, a P2P NFT Lending Protocol – How Does it Work?
The NFT marketplace Blur on Monday launched a new NFT-focused lending platform that operates without expirations and with no external price oracles like other lending platforms rely on.
The new lending platform was introduced on Twitter and in a detailed whitepaper by Dan Robinson, a lawyer and researcher at crypto investment firm Paradigm, and one of the main backers of the project, saying about the project that it “supports arbitrary collateral, has no oracles, and has no expirations.”
According to Robinson’s whitepaper, Blend differs from traditional lending protocols by allowing borrowing positions to be open for an indefinite period, with market-based interest rates.
“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,” the whitepaper said.
It added that Blend loans by default have fixed interest rates 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.
Robinson’s introduction matches what the Blur team wrote about the new platform on Twitter, where it called it 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 the full price up front, whether buying a house or a top NFT collection.
“Many may want to buy into a collection, but very few can afford to pay it all at once. The solution is NFT lending,” the Blur team wrote.
The team added
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