NFT Lending Protocol Bend DAO Propose Emergency Changes!

Bend DAO's dev team regrets underestimating how illiquid NFTs could be in a bear market when setting initial parameters.

Bend DAO's developers proposed emergency measures Monday to stabilize the ecosystem.

The same day, the project had just 15 wrapped Ether (wETH) worth $23,715 to repay lenders. The mechanism lent 15,000 ETH.

Bend Dao's development team suggested limiting collateral liquidation to 70% of loan value, down from 85%, to avoid a credit crisis.

Next, its platform will reduce NFT auctions from 48 to 4 hours.

The requirement that Bend DAO's minimum bid price be 95% of OpenSea's floor price would be removed.

Loan rates will drop from 100% to 20%.

Finally, BendDAO's treasury could cover bad debts with revenue.

Even among reputable collections, falling NFT floor prices in the bear market have put many NFTs in danger of liquidation as interest rates soar.

As interest rates on "debt-secured" NFTs skyrocket to nearly 100%, some users may find it more economical to let go of their digital collectibles (which are also decreasing in value), resulting in bad loans.

Third, NFT markets are less liquid than coin or token markets, so there may be no bids during liquidation, adding to the death spiral.

Before credit issues, Bend DAO was a top NFT borrowing and lending platform.

Current proposal vote will last 24 hours and has passed quorum with 99.23% in favor.

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