Blur and Paradigm recently launched Blend, a P2P NFT lending agreement, and the function of buying NFT with loans based on this.
What are the core features of Blend? What are the product advantages? And how? This article will give you an in-depth understanding of Blend, the next-generation NFT lending protocol.
The core features of Blend are:
Peer-to-peer, perpetual lending, no expiration time, no oracle machine required
The lender decides the loanable amount and APY and publishes the offer, and the borrower chooses the offer
The lender withdraws, and the borrower needs to repay the loan within 30 hours or repay the old one with a new loan, otherwise it will be liquidated
Borrowers can repay at any time
Support buy now and pay later, that is, down payment + loan to buy NFT
Product advantages
The core advantage of Blend is to unify non-essential elements, reduce the complexity of the system, realize the flexible migration of loan relationships within the system, price risks and benefits through market games, and maximize user needs. Yes, in a sense, Blend is quite like Qin Shihuang's "cars on the same track, books on the same text".
Compared with traditional peer-to-peer models such as X2Y2, Blend unifies the three elements of borrowing, mortgage rate, interest rate, and mid-term term, into a sustainable and flexible model, which greatly improves the liquidity of lenders
Blend unifies the lender's exit and liquidation. After all, liquidation is essentially that no one is willing to take over the project
The oracle is determined by the timing of service liquidation, and Blend will give the lender the right to withdraw the option for flexible handling.
Blend has fixed terms (mortgage rate and interest rate) on the surface. In fact, due to the extremely flexible exit mechanism, the terms in effect will basically follow the market average. Because if the terms are significantly worse than the market level, the borrower has the incentive to repay and then borrow other offers. If the terms are significantly better than the market level, the lender will have the motivation to withdraw and issue a new offer to lend money to others.
For the borrower, the higher the mortgage rate, the better, the lower the interest rate, and the more flexible the term, the better. Regarding the first two points, on the one hand, the effective terms will follow the market level as mentioned above, and on the other hand, Blend operates by allocating incentive points to lenders. The higher the loanable amount and the lower the interest rate, the more points will be awarded. For the third point, Blend uses the setting of perpetual + repayment at any time, which realizes the complete flexibility of the borrower's term.
For the lender, the mortgage rate and interest rate also follow the market level and Blur incentives, and there is no risk of losing money. The term is also very flexible, you can exit if you want, which is equivalent to having the self-defined advantages of the peer-to-peer model on the one hand, and enjoying the liquidity advantage close to the peer-to-pool model, and you can also formulate your own risk control standards to exit flexibly.
Loan to buy NFT
other
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In addition, in Paradigm’s design document, when the lender exits, the Dutch auction will be initiated, which means that the interest rate will gradually increase from 0% to 1000% over time, and the new lender can offer at any time in the middle. If no one accepts the loan after reaching 1000%, the loan will be liquidated party, give the mortgaged NFT to the current lender.
But on the Blur page, we can see that the borrower needs to repay the loan or borrow new money to repay the old one. In fact, it is not difficult to speculate that it is because there are currently two variables, the loan amount and the interest rate, while Paragidm only considers the interest rate variable in its design. In fact, there is not much difference between the two, both of which strive to transition to the new terms that are most beneficial to the borrower, but one does not require the borrower to operate and the other needs it.
Summarize
Summarize
Blend unifies non-essential elements in the traditional peer-to-peer lending model, realizes the efficiency improvement of "cars on the same track, books on the same text", and fully integrates with the Blur transaction module, which has greatly improved the product level. Can be more common.
