Blend Enables Peer-to-Peer Loans and Pay Later feature

Blend Enables Peer-to-Peer Loans and Pay Later feature

Blend Enables Peer-to-Peer Loans and Pay Later Feature.

Blur, the leading NFT marketplace by trading volume, is diving into NFT lending with its new Blend protocol, which went live today.

The Buy Now, Pay Later option now enables traders to buy NFTs without having to bear the full cost of the transaction. Borrowers can either buy the token in full once they have the funds to repay the loan, or look to sell the asset if it's worth it, pocketing the difference.

Users can borrow against their NFTs with specific amounts and interest rates offered by individual lenders, which is Blur's other product deal with peer-to-peer lending.

The lending features support three NFT collections - CryptoPunks, Azuki, and Milady - but the Blend protocol allows for any asset to be collateralized. The Milady stock price is up 30 cents after a wave of leveraged buying.

The Blur team is launching Blend under the same business license as Uniswap, the leading decentralized exchange in terms of trading volume used for its influential V3 protocol.

Blur has impacted the NFT space since it was launched in October. The NFT marketplace and aggregator has been grappling with a long-standing battle to become the best trading platform for trading. After OpenSea launched a more directly competitive 'pro version' last month, Blur is again stepping into new territory.

NFT influencer Cirrus said Blend will lead to a 'leverage-fueled' run in NFTs, while another user pointed out that unwary traders may not fully understand what they are getting into.

The release of two new products made up of a new protocol hasn't shielded Blur's token from a down day in crypto markets - BLUR has dropped nearly 9% in the past 24 hours, while BTC is down more than 4% and ETH nearly 3%.

With Blend, lenders can initiate a refinancing auction at any time. They would typically do so if an NFT's price falls, increasing the risk of the loan becoming undercollateralized or if they simply need the money back.

Refinancing auctions begin with a low rate, slowly increasing until a new lender is found. If a BNPL loan isn't found in six hours, the borrower has 24 hours to either repay or refinance their loan.

Blur loans have no fixed maturity date, borrowers can close the loans at any time, while lenders can call for a refinancing auction at any time, resulting in either another lender stepping in or liquidating the collateral.

Will Sheehan, the founder of Parsec Finance, a trading interface for DeFi, said that the new Blend protocol differs a bit from the designs of projects like BendDAO and Paraspace, which have traditionally had an edge in the NFT lending space.

Compound, a protocol that pooles lenders' fungible assets together for borrowers to use, is an example of the pooled model in the broader DeFi space.

Dan Robinson, head of research at venture firm Paradigm, who helped Blend's development, highlighted that the protocol doesn't rely on any oracles. The risks of trusting a third party, which crypto pros frequently consider, are introduced by oracles, which provide data that is not native to the blockchain.

While the peer-to-peer model may not have become the dominant model in NFTs so far, Robinson has a notable track record in DeFi. The researcher, one of the primary contributors to Uniswap V3, was hailed as a key development in DeFi.

Paradigm leads Blur's seed round of $11 million in 2022 and is also an investor in Uniswap.