Blend: In-depth Analysis of the New Generation NFT Lending Protocol

Recently, a P2P NFT lending protocol called Blend has attracted widespread attention in the market. This protocol, co-developed by a well-known investment institution, not only provides NFT lending capabilities but also innovatively implements the function of purchasing NFTs through loans. This article will delve into the core features and product advantages of Blend, revealing how it stands out in the NFT lending market.

Core Features of Blend

The Blend protocol has the following outstanding features:

1. Peer-to-peer perpetual lending model, no fixed maturity time, no need to rely on oracles.
2. Lenders can independently set the loan amount and annualized yield, and publish loan offers.
3. Borrowers can choose the optimal solution from multiple offers.
4. The lender can exit at any time, and the borrower must repay or re-borrow within 30 hours, otherwise they will face liquidation.
5. The borrower has the flexibility to repay at any time.
6. Innovatively supports the "buy now, pay later" model, allowing users to purchase NFTs through a down payment plus a loan.

Product Advantage Analysis

The core advantage of Blend lies in its simplification of system complexity, unification of non-essential elements, and realization of flexible migration of lending relationships within the system. It prices risks and returns through market competition to maximize user satisfaction.

Compared to traditional peer-to-peer lending models, Blend shows significant advantages in the following aspects:

1. Unified lending period: Adopting a perpetual flexible model greatly improves the liquidity issues of lenders.
2. Simplified liquidation mechanism: Unified handling of lender exit and liquidation process.
3. Flexible risk management: The oracle has been removed, and the decision-making power to exit has been given to the lender.

The design concept of Blend allows both borrowers and lenders to benefit:

• For borrowers, the protocol offers flexible repayment terms and market-oriented interest rates.
• For lenders, it retains the customization advantages of the point-to-point model while enjoying the liquidity advantages close to the point-to-pool model.

Innovative Feature: Loan to Purchase NFT

The loan purchase NFT feature launched by Blend is similar to mortgage loans in the real estate market. Users can purchase NFTs by paying a down payment and simultaneously initiating a collateral loan, which improves capital efficiency. Although it is conceptually similar to flash loans, Blend has deeply integrated this feature into the platform, which is expected to attract a large number of new users and drive rapid growth for the platform.

Detailed Explanation of the Operating Mechanism

According to the protocol design, when the lender wishes to exit, the system will initiate a mechanism similar to a Dutch auction:

1. The interest rate starts at 0% and gradually rises to 1000% over time.
2. New lenders can make takeover offers at any point in time.
3. If the interest rate reaches 1000% and no one takes over, the borrower will face liquidation, and the mortgaged NFT will be transferred to the current lender.

However, in practice, borrowers need to repay or refinance within the specified time. This adjustment may be aimed at better balancing the two variables of loan amount and interest rate.

Future Outlook

It's worth noting that Blend has not yet fully realized the potential of its native token. Although token holders have governance rights to set various parameters and the power to activate the fee mechanism after six months, the specific token economic model still holds considerable uncertainty.

Summary

Blend has significantly improved lending efficiency by innovatively unifying non-essential elements. Its deep integration with the trading module showcases tremendous potential at the product level. Although there is still room for improvement in token empowerment, Blend undoubtedly brings new possibilities to the NFT lending market.