NFT borrowing and lending protocol users The combination has taken out loans worth nearly a quarter of a billion dollars. And it’s just the first month of Blend. The market has taken notice, and Binance has also moved into NFT lending. How worried should Blend’s competitors be?

Blend, an NFT lending and borrowing protocol developed by Blur in partnership with Paradigm, claims to have had a great first month. Since its launch on May 1, Blend has facilitated over 15,800 loans totaling 123,500 ETH ($224.4 million), according to a report from Nansen.

First Month bumper

Blend stands out from its competitors with its unique features. It charges no fees to borrowers and lenders, eliminates the need for oracles, and imposes no expiration on loans. Borrowers can secure fixed-rate ETH loans against their NFTs without worrying about repayment deadlines or collateral liquidation. Its launch greatly contributed to the continued funding of NFTs.

The protocol’s lending and borrowing functionality initially covers popular NFT collections such as CryptoPunks, Azukis, and Mildays, and has expansion plans. Blend’s fixed-term lending approach simplifies the protocol by removing oracle dependencies and allowing lenders to measure risk levels through loan-to-value (LTV) ratios and interest rates.

Blend’s elimination of loan expiration sets it apart from other peer-to-peer protocols. The protocol aims to offer increased flexibility. Lenders can exit their positions at any time through refinancing auctions, limiting their risk exposure and fostering an efficient market. Loans on Blend remain active until borrowers set up refinancing auctions or repay the amount owed in full.

Not everyone is sold. But Brent Xu, CEO and co-founder of lending and borrowing platform Umee, believes Blend is a step forward for the industry. “Lending to NFTs provides new on-chain return generation opportunities that will create new markets for the DeFi ecosystem.”

Rath Blend’s success should worry competitors

«One of the most significant advantages of NFT technology is its ability to bring physical entities such as deeds and bonds onto a chain,» explained Xu. «As industry leaders deliver on this promise, we will see a much more diverse set of use cases.»

However, Charles Wayne, co-founder of Galxe, believes that competitors should be concerned about Blend’s great liquidity and transaction volume.

“Liquidity is always an issue for blue chip NFT holders. The launch of Blend was anticipated and addresses the needs of the large whales in the Blur market,” he said.

“Obviously, it’s added to the competitive advantages because it’s for Fuzzy, now one of the biggest NFT markets. The NFT community has always had a demand for adding liquidity and flexibility to NFT assets, especially for whales “

However, this week exchange giant Binance announced that it was also joining the NFT lending craze.

Currently, the exchange has limited the service to four collections: BAYC, MAYC, Azuki, and Doodles. Initially, the platform is keeping the annual interest rate at 3.36% and it will increase to 11.20% later. The loan-to-value ratio is 40% for Doodles, 50% for Azuki and MAYC, and 60% for BAYC collections.