Blur introduces NFT perpetual lending protocol
On May 1, nonfungible tokens marketplace Blur launched Blend, a peer-to-peer perpetual lending protocol that supports NFT collateral. Developed with venture capital firm Paradigm, developers cite Blend's rationale as a means of "financialization to scale."
4/ Every trillion dollar market relies on financialization to scale. NFTs are no different.Instead of paying $1m for a house, buyers put $100k down and pay the rest through their mortgage. Without this mechanism, almost no one would be able to afford homes. pic.twitter.com/4J96G3pGnJ
Blend has neither oracle dependencies nor expiries, allowing borrowing positions to open indefinitely until terminated. Developers also claim that the protocol would collect zero fees from borrowers and lenders:
Per design, Blend automatically "rolls a borrowing position for as long as some lender is willing to lend that amount against the collateral." For this, no on-chain transactions are required unless one party decides to exit the position or there is a change in interest rate.
As a perpetual lending protocol, borrowers and lenders extend the loan expiration time by a predetermined period by default. If a lender wishes to terminate the loan against the borrower's wishes, an interest-rate "Dutch auction" for refinancing is held when the borrower has not repaid the debt at expiration. The auction begins at 0% refinance interest with a steadily rising rate.
That said, developers explained that borrowers can repay the loan at any time on Blend. "If a borrower wants to change the amount they have borrowed or get a better interest rate, they can atomically take out a new loan against the collateral and use the new principal to repay the old loan," they wrote.
Launched in the third quarter of
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