- There is just 12.5 wETH in the contract.
- Several floor prices for NFT also decreased.
- BendDAO provides customers with access to a peer-to-peer lending platform.
Many NFT’s floor prices fell as a result of the current NFT market downturn. As a result of the low health factor loans, several NFTs on BendDAO entered the danger zone.
The potential liquidation of millions of Bored Apes and other NFTs, in turn, caused market-wide panic last week.
The bulk of NFTs have defaulted on loans as of the time of writing, and no bids have been made on them.
Due to BendDAO’s requirements, bidders had to Bid more than the borrowed debt and the OpenSea floor price and also had to lock up their ETH for the following 48 hours.
As the debt could occasionally be higher than the floor price and market players typically do not want to risk a time lock of hours for floor NFTs, the existing structure does not incentivize bidding. In the end, we might witness a lot of NFTs permanently imprisoned in BendDAO. Nobody would touch those NFTs as the loan continued to accrue interest and balloon to a sum greater than the floor price.
While the website still shows that they have over 35,000 ETH in TVL, the developers have confirmed on discord that the happenings were caused by a front-end bug.
The initial decentralized non-custodial NFT-backed lending technology called BendDAO offers users the ability to borrow money via the peer-to-peer lending platform and leverage their NFTs. Normally, lenders can pledge their NFTs as security to borrow up to 40% of the NFTs’ floor value. The interest rate on the loan would be between 15% and 25%.
