Blur and Paradigm to launch new protocol for NFT lending Blend
New protocol by Blur and Paradigm leverages off-chain offering technology to create a peer-to-peer lending market for NFTs.
NFTs marketplace Blur, in partnership with crypto/Web3 investment firm Paradigm, has launched a new protocol that enables peer-to-peer lending of NFTs called Blend.
Blend uses a novel off-chain offering protocol to match borrowers and lenders of NFTs, offering competitive rates and flexible terms. Borrowers can use their NFTs as collateral to access liquidity, while lenders can earn interest on their funds. Blend aims to create more opportunities and liquidity for the NFT ecosystem, particularly for high value collections such as the Bored Ape Yacht Club and CryptoPunk NFTs.
According to Blur's announcement on Twitter, the protocol was developed in collaboration with Paradigm.
1/ Introducing Blend: the Peer-to-Peer Perpetual Lending Protocol for NFTs.— Blur (@blur_io) May 1, 2023
Built in collaboration with @danrobinson and @transmissions11 at @paradigm, Blend enables 10x higher yield opportunities than current DeFi protocols and unlocks greater liquidity for NFTs.
Here’s how 👇 pic.twitter.com/uOFC6i3LSq
Blender works by matching borrowers and lenders in a pool-based system where interest rates are fixed and transparent. Borrowers can use their NFTs as collateral and repay the loan at any time, while lenders can earn passive income on their capital. The protocol also has a native token, $BLEND, which allows for community governance and future enhancements. In addition, Blender addresses the issue of NFT price volatility by using a multi-collateral model that promotes diversification and stability.
Blur explained that NFT lending is the solution for people who want to buy into a collection but cannot afford the high price. With Blend, they can borrow NFTs from other users and enjoy the benefits of ownership without paying upfront. Alternatively, they can use their own NFTs as collateral to borrow money and buy more NFTs. Blur believes that Blend will unlock the full potential of NFTs as a new asset class.