Press: Recently, the lending rate of BendDAO, an NFT lending protocol based on the fund pool, has exceeded 100%. Due to the liquidation caused by the price drop of blue-chip NFTs such as BAYC, BendDAO’s ETH has been in a net outflow, leading to a liquidity crisis. dForce founder Yang Mindao discussed the implications of the BendDAO liquidity crisis for DeFi and NFT.
1. A bear market is a good time to build as it is itself the perfect storm to test PMF and verify/invalidate protocol designs. The liquidity crisis of BendDAO, a pool-based NFT lending protocol, is another good look at the DeFi X NFT space.
2. They are almost 100% utilized, pushing both supply and borrowing rates to their peaks. As I have discussed in other podcasts, the fundamental problem with pool-based NFT lending is the mismatch between assets (non-fungible, illiquid NFTs) and liabilities (on-demand ETH deposits).
3. Think of it as a bank with demand deposits as their only source of funding, and their assets are all real estate loans (or loans to art collectors). In the tradfi world, such a banking model will not work.
Don’t we have blue chip NFTs? Let’s debunk the myth of blue-chip NFTs .
4. Take BAYC as an example, it is the largest NFT collectible with a market value of $1 billion, but the daily trading volume is only $1.4 million, and the trading volume is only 0.14%; MC-like homogeneity eligible for DeFi lending collateral What is the trading volume of the tokenized token? About 5-10%.
5. Essentially, “blue-chip” BYAC is a non-homogeneous long-tail asset in the DeFi standard. If you’re using on-demand liabilities to fund these assets, it’s bound to go wrong in one way or another. There are many such failed attempts in DeFi – Fuse(Rari)/Kashi(Sushi)/Beta
6. There is no easy solution for BendDAO. They need to take temporary action to shift the interest rate curve and lower borrowing rates, so liabilities don’t reach levels where borrowers are less motivated to repay. Once stabilized, their DAO may issue a debt token.
7. Participate in failed auctions and own those NFTs and redistribute debt tokens into ETH deposits to reboot the system. But there is no long-term solution to restoring ETH’s liquidity to break the deadlock.
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/yang-mindao-what-are-the-implications-of-the-benddao-liquidity-crisis-for-the-defi-and-nft-industries/
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