✍️ 24 August, 2022 – 17:46 👤 Editor: Jakub Motyka
- The NFT market has been one of the hardest hit by the crypto winter.
- Several Bored Apes (BAYC) holders took out loans in BendDAO using your NFTs as collateral.
- As the BAYC price floor falls, the risk of liquidation increases.
In the wake of falling NFT market prices, several Bored Apes Yacht Club (BAYC) holders fear their BendDAO loans could end up in liquidation. The controversy arose on Twitter, after a user shared the capture of an auction of a Bored Ape. This is NFT #533, which was used as collateral for a loan of 66.95 ETH. It should be noted that the minimum price of the collection is currently 68 ETH.
Remember that BendDAO is a peer-to-peer NFT Fi protocol that allows you to request ETH loans collateralized with NFTs. In other words, users use their tokens as collateral to ask for up to 40% of the minimum price of their assets. In the wake of the collection price drop, about 45% of NFTs are in the danger zone. These could be auctioned, or liquidated, at any time.
How Would Massive Liquidations Affect BAYC’s NFTs?
Within the BendDAO platform there are a total of 272 BAYC in the form of loan guarantees. This represents 2.8% of the collection, in addition to 1.6% of the NFT Mutant Apes. At the time of settlement, the platform proceeds to auction the tokens to recover the investment. However, this will cause the NFT price floor to continue to decline.
Many BAYC holders fear a potential chain reaction of sell-offs in the NFT market. They have even gone so far as to compare the liquidation potential to the crash of Celsius or Voyager. Unless borrowers get the situation under control, new auctions are likely to take place in the coming days.
More news from the crypto world:
- Chinese Crypto Now Can Be Used To Pay For The Bus
- Bitcoin (BTC) Mining Firms Doing Massive Sales to Keep Operating
- BendDAO Is Out Of Money: NFT Crisis Is Close
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