Blend’s unprecedented rise: dominating 82% of the NFT lending market in 22 days

2023-05-27 23:59:02

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A recent blog post from DappRadar reported that Blur’s new platform Blend has had a meteoric rise in the non-fungible token lending (NFT) market. Blend, a peer-to-peer lending protocol launched by Blur on May 1, 2023, experienced a staggering 3,945% growth in its first few weeks of operation. The total volume of loans increased from 4,200 ETH ($7.6 million) on its first day to 169,900 ETH ($308 million) in just 22 days. Blend’s rapid growth has allowed it to outperform other centralized platforms by approximately 2.93x in weekly loan volume. Additionally, Blend now accounts for 82% of the lending volume across all NFT lending protocols. Total Value Locked (TVL) on Blend also saw a significant increase, from $5.21 million on launch day to $24 million on May 22, representing a 360% growth. This increase in Blend’s TVL also boosted Blur’s overall TVL, which increased from $119 million to $146 million, a respectable 22.6% increase. Blur’s rise to prominence began with the successful completion of its Season 1 and subsequent token launch, propelling it to surpass OpenSea in trade volumes. Currently in their Season 2 incentive campaign, Blur has come up with a unique strategy to bolster their position. Moving away from traditional offers and trading points, Blur is incentivizing merchants to exclusively list their NFTs on its platform by offering rewards. For this purpose, 300 million BLUR have been allocated, equivalent to $186 million. This tactic has attracted numerous NFT whales to the platform, resulting in $19 million in washed trades registered on Blur over the past week, traded from 1,494 wallets. However, the trading volume for the last seven days was $104.35 million, a decrease of 15.93% from the previous week. This change suggests that Blur is currently used primarily for loans rather than transactions. In fact, in the last seven days, nearly half (46.20%) of Blur’s activity originated from NFT loans, traded by an average of 306 unique users per day. Since its launch, the trend of daily unique users has been on an upward trajectory. On its first day, Blend registered 218 users, but on May 22, the number increased to 358, a significant 64% increase. In fact, these numbers represent an average of 60% of users using other lending platforms during the same 7-day period. In fact, Blend has made remarkable strides in the NFT lending protocol, leaving an indelible mark in a remarkably short period of time. The milestones achieved by Blend in just 22 days are incredible, achieving a volume of loans that other NFT lending protocols have taken years to achieve. This growth and dominance of Blend attest to its successful strategy. Before Blend entered the market, at least eight other NFT lending protocols, including NFTfi and BenDAO, were vying for prominence. NFTfi, the pioneering NFT lending protocol, launched in May 2020 and has since managed to facilitate a total loan volume of $427 million. BenDAO, another notable player in the NFT lending arena, has also made significant strides. Despite being a relatively new entrant, BenDAO amassed a total loan volume of $315 million in a span of over a year. However, Blend has really revolutionized the market. The Blend team has not only made a substantial impact on NFT trading volume, but has also established a firm footing in the NFT lending space in a remarkably short period, setting an unprecedented bar for its competition. Blend’s portfolio includes three NFT collections: CryptoPunks, Milady Maker, and Azuki. These collections have catalyzed the growth of a vibrant digital asset market, attracting the attention of a wide range of traders and investors. The recent incentives for BLUR’s second airdrop season have ignited an interesting trend in the NFT landscape. In particular, many NFT whales have taken a somewhat aggressive approach to breeding on the platform. In particular, they have been dumping significant amounts of their top-tier NFT holdings on the market, resulting in a trend of large NFT “downloads”. This peculiar pattern played out dramatically on May 21, when a slew of top-notch NFTs from esteemed collections were downloaded on Blur. A staggering 25 CryptoPunks were bid, raising a total of 1,200 ETH, equivalent to around $2.2 million. The incentive structures at Blur seem to encourage, or at least not discourage, significant sales of top-tier NFTs. This leads to volatile market conditions and potentially inflated trade volumes, driven not necessarily by organic demand but by the search for airdrop rewards. This trend, while interesting, could pose risks to the stability and health of the NFT market as it could lead to significant price volatility and potential manipulation. Featured Image Credit: Photo/Illustration by “andrey metelev” via Unsplash