On Monday, developers of decentralized nonfungible tokens (NFTs) borrowing and lending protocol Bend DAO suggested new emergency measures so that they can stabilize the ecosystem. Within 24 hours, it had been says the work had just less than 15 wrapped Ether (wETH) worth $23,715 to repay lenders. Roughly 15,000 ETH was given while using mechanism. In order to save the protocol from the credit crisis, the curvature Dao dev team recommended the liquidation threshold for collateral could be restricted to 70% from the loan value, lower from 85%.
Next, the auction period for NFTs on its platform could be reduced from 48 to four hrs. Then, the requirement of the minimum bid cost of NFTs on Bend DAO to become pegged to 95% from the floor cost on popular digital collectibles buying and selling platform OpenSea could be removed. Rates of interest on loans should be reset in the current 100% to twentyPercent. Finally, the BendDAO treasury could be empowered to pay for unhealthy financial obligations and employ revenue.
The collapsing floor prices of NFTs within the bear market, even among trustworthy collections, have placed many NFTs at risk of liquidation as rates of interest are impelled to abnormal levels. As rates of interest on “debt-guaranteed” NFTs have skyrocketed to almost 100%, quite a few users might be discovering it cheaper to merely forget about their digital collectibles (that are also decreasing in value) rather of having to pay back your debt, leading to bad loans. Thirdly, NFT financial markets are less liquid as coins or token markets, meaning there really might not be bids throughout an NFT’s liquidation process, further contributing to the dying spiral.
Bend DAO was considered like a blue-nick NFT borrowing and lending platform before credit issues started. The election for that current proposal can last for twenty-four hrs and it has passed the needed quorum of 47 million veBend with 99.23% for.
1/ A about how @BendDAO presently works, why the FUD is wrong, and also the real issues with the present protocol.
Full disclosure: I pulled my $eth yesterday and also have no current exposure. This really is to assist others understand their position or individuals considering lending.
— TradFiWhale.eth (@TradFiWhale) August 21, 2022
