A BendDAO representative will discuss how the protocol operates, why the FUD is incorrect, and the real issues with the present protocol. I pulled all my $eth yesterday and currently have no exposure. This is to assist others grasp their position or those thinking about investing in a for-profit DAO.
On Monday, Bend DAO, which develops decentralized nonfungible token lending and borrowing protocols, suggested new emergency measures to stabilize the ecosystem. The same day, it was revealed that the project had only 15 wrapped Ether (wETH) valued at $23,715 to repay debtors. Around 15,000 ETH was lent using the system. In order to prevent the protocol from going bankrupt, the dev team suggested lowering the liquidation threshold for collateral from 85% to 70% of the loan value.
At the same time, Bend DAO would reduce the auction period for NFTs on its platform from 48 hours to four hours. Interest rates on loans would be reduced from 100% to 20%. Finally, the treasury would be able to cover bad debts and use revenue to do so. A minimum bid price for NFTs on Bend DAO would be removed. OpenSea is a popular digital collectibles trading platform.
On top of the fact that many NFTs in reputable collections have experienced a collapse in floor prices in the bear market, interest rates have been driven to abnormal levels, which has resulted in a lot of NFTs being at risk of being liquidated. Some users may have found it more economical to simply let go of their digital collectibles (whose value has also been dropping) rather than pay off their debt, resulting in bad loans. Lastly, as NFT markets are not as liquid as coin or token markets, it may be difficult to find bids during an NFT liquidation process, which may further contribute to a death spiral.
Before credit issues arose, Bend DAO was regarded as a blue-chip NFT borrowing and lending platform. The current proposal has passed the required quorum of 47 million veBend, with 99.23% in favour, and will last for 24 hours.
In this post, I’ll be covering @BendDAO ‘s current functionality, why FUD is flawed, and the issues with the present protocol. I withdrew all my $ETH yesterday and currently have no exposure. This is to assist others comprehend their standing or whether they’re thinking about lending money.