Blur Users Open $95M Loans Backed By NFTs in 10 Days

Upstart NFT marketplace Blur’s lending protocol, Blend, is off to a flying start.

The platform, which allows users to borrow crypto against digital collectibles in perpetuity, has so far witnessed 51,656 ETH ($95 million) in loans since its inception 10 days ago, a Dune dashboard shows. More than 3,000 individual Blend loans have been opened to date.

Blend’s May 1 launch helped drive overall NFT loan volume to record highs, hitting $67 million over the week. Blend loans made up 75% of that figure, outstripping competing platforms such as NFTfi, Arcade, X2Y2 and BendDAO.

For scale, cumulative NFT loan volume in US dollars stands at more than $1 billion across 76,000 loans. There’s currently nearly $150 million in outstanding debt, per a separate dashboard.

Blend currently supports loans backed by four NFT collections: anime-inspired Azukis, street-stylish Miladys, deity-centric DeGods and wrapped versions of seminal CryptoPunks.

Azuki is so far the most popular collateral on Blend so far, representing nearly half of the 4,194 ETH ($7.7) in active loans.

Those lending out ether against Azuki-backed collateral are earning an average of 17% APY, data shows. Wrapped CryptoPunks, which have 952 ETH ($1.7 million) in active loans, stands much higher — averaging 39% annual percentage yield for lenders.

The process is as follows:

Deposit: As a borrower, you lock your NFT into Blend as collateral
Set terms: Specify the loan terms, including ETH amounts and interest rate
Lender acceptance: Lender agrees to your terms and provides ETH
ETH transfer: You receive the lender’s ETH; your NFT stays in Blend as collateral
Accruing Interest: Over time, the lender earns interest on the loan
Repayment/liquidation: Repay the loan to get the NFT back. Defaulting or failure to refinance via auction means the lender collects the NFT.

*Azuki collateral is good collateral on Blend (source)*

Floor prices across all four supported NFT collections have varied over the past 30 days, with Azuki, DeGods and Miladys falling between 1% and 10%.

Miladys is the outlier, up around 69% going from 2.24 ETH ($4,140) to 3.8 ETH ($7,020), per OpenSea. Ether has fallen about 3% over the same period.

Generally, lenders would be willing to dish out ether in return for NFTs if they believe the tokens won’t massively decline in value — or the interest rate on offer is worth their while.

As it turns out, there seems to be many out there eager to take that bet.

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