Blur, the major rival of OpenSea, has introduced a new lending protocol called “Blend” that supports arbitrary collateral, including non-fungible tokens (NFTs).
Unlike other protocols, Blend does not have any oracle dependencies or expiries, which allows borrowing positions to remain open indefinitely until liquidated, with market-determined interest rates.
The peer-to-peer lending model employed by Blend involves matching borrowers seeking to borrow against their non-fungible collateral with lenders offering the most favorable rates, utilizing an advanced off-chain offer protocol.
Blend loans come with fixed rates and no expiration date, enabling borrowers to repay at their convenience and lenders to exit their positions by initiating a Dutch auction — a method of selling in which the price is reduced until a buyer is found. In the event that the auction fails to find a new lender at a revised rate, the collateral is liquidated and the lender takes ownership of it.
Blend stands out from other lending protocols as it operates independently without relying on oracle dependencies in the core protocol. Rather than setting interest rates and loan-to-value ratios through an oracle, Blend enables lenders to dictate the terms they offer.
Blend also supports perpetual loans, which means borrowers don’t have to worry about manually rolling their positions or incurring harsh penalties, such as confiscation of their NFT.
Blend is similar to other peer-to-peer lending protocols, but with important differences that improve the borrower’s experience. By allowing users to borrow against NFTs, Blend makes it easier for people to access loans using the digital assets they own.
This action marks yet another advancement by the NFT marketplace to enhance user experience. In February, Blur took a step further by airdropping over 300 million of its BLUR tokens as a reward to loyal traders.