New P2P lending platform for NFTs launches
Blur, a non-fungible tokens (NFT) marketplace, has launched Blend, a peer-to-peer lending platform that aims to boost liquidity for the digital assets.
The new platform, which was developed with venture capital firm Paradigm, enables users to borrow against their NFTs, with the specific amounts and interest rates decided by individual lenders.
“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,” said Paradigm in a blog post on its website.
Read more: Crypto lender Nexo issues first NFT-backed loan
“By default, Blend loans have fixed rates and 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 lending features initially support three NFT collections – CryptoPunks, Azuki and Milady – but the Blend protocol allows for any asset to be collateralized, according to a report in The Defiant.
Read more: P2P NFT marketplace Flowty raises $4.5m in seed capital
Blur will also offer a buy-now-pay-later option, which allows users to buy NFTs without bearing the full cost upfront. Borrowers can either buy the token in full once they can afford to repay the loan, or sell the asset if it appreciates.
Blur has zero fees for lenders and borrowers. It has no expiries, allowing borrowing positions to remain open indefinitely until liquidated, with market-determined interest rates, according to Paradigm.
Read more: P2P lending models being used for NFT-backed loans
An NFT is a digital token that use the same blockchain technology as cryptocurrencies. It gives a buyer ownership of a unique digital piece content such as art or memorabilia that is registered on the blockchain.
