Blur marketplace will launch a lending mechanism with collateral in NFTs

The new product will allow users who previously could not afford to buy tokens from expensive collections to enter the ecosystem

02.05.2023 - 08:30

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What’s new? NFT marketplace Blur has announced the launch of Blur Lending (Blend), a peer-to-peer (P2P) lending protocol with collateral in a variety of assets, including non-fungible tokens. The team noted that Blend differs from other platforms in its ability to provide open-ended loans without the use of oracles that calculate liquidation terms and interest rates. The product will maximize the liquidity of NFTs and enter the ecosystem for new users who previously could not afford to buy tokens from expensive collections, according to the blog.

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What else is known about the new project? The team compared buying tokens through Blend to buying an apartment on a mortgage: users contribute a percentage of the full cost, finance the remaining amount, and then pay it off. The developers believe that for lenders, Blend will provide 10 times higher returns than other decentralized finance (DeFi) protocols.

The protocol has no fees for either side of the deal, and no oracles, allowing lenders to determine the terms of the loan themselves. To avoid losing tokens deposited as collateral, the platform will automatically extend the loan position for a refinancing auction. The competitive process for extending the loan will be conducted in an auction format. The subject of bidding in this case will be the amount of the interest rate.

The project was created in collaboration with Dan Robinson, head of research at venture capital firm Paradigm and investor in decentralized exchange (DEX) Uniswap, along with an anonymous researcher Transmissions who was previously involved in developing the Seaport protocol. Paradigm is the lead investor in Blur.

On April 28, Binance Futures, a platform from the Binance exchange, launched futures on Blur’s native asset. After the announcement, the BLUR rate jumped by 20,63% to $0,715875.

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