In August, BendDAO broke out unexpectedly, and a large amount of debt (BAYC) was about to be liquidated. That period was the coldest few days in the entire NFT circle. In the bear market, the liquidity of NFT assets is the worst. In an early BendDAO article ()https://mirror.xyz/oxpepper.eth/aR49ivR6FzFpMPcHdMu0knRlgHKUC-93bsQUS-x9oU4, I explained that lending is a track with serious homogeneity. It is a double-edged sword. When used well, it is twice as effective as half the result. When used badly, it becomes like drawing a knife to cut off the water, but the water flows more. How to achieve a clever balance between realizing the influence of blue-chip NFTs and staking income is what collectors need to think about, so BendDAO was caught.

“On August 23, BendDAO conducted an emergency parameter update, gradually reducing the liquidation threshold from 95% to a new baseline of 70% as of September 20, and also agreed to shorten the bid lock period from 48 hours to 4 hours.”

Let’s take a closer look🤔: Do blue chips in a bear market have a high impact?

Otherwise, what makes people feel comfortable in a bear market is that there is sufficient OTC liquidity. Blue chip NFT does not mean $CASH in hand.

We are still in the early stages of defining blue-chip NFTs, so it is not difficult to understand why BendDAO arbitrage occurred.

Executable arbitrage strategy: Pledge NFT at a high price to borrow ETH, and use part of the ETH to provide liquidity to obtain Bend in order to obtain priority auction rights. When the NFT is liquidated below the healthy red line, the NFT can be redeemed at the market price or a lower auction price at the first time. Of course, you can also choose not to participate in arbitrage and simply "sell" the NFT through staking. Isn't it more convenient?

1. NFT lending needs new "adrenaline" - put the transformation of the liquidity layer on the agenda!

A semi-effective market price under economics must be a market that reflects all historical information and all publicly released information. The NFT market is a weakly efficient market, and so are NFT blue chips. The financial sector reflected in NFT lending is even more vulnerable.

I have researched 8-10 NFT lending projects, including both P2P and P2Pool projects. The financial situation of all projects is very tight. The lending rates of many projects have completely inverted. Not only inverted, but also many projects have negative deposit rates. The existing financial behavior cannot support the NFT lending market.

Solving the problem of insufficient lending liquidity should not start from the existing essential behavior of borrowing and lending. Borrowing and lending currently have only a few purposes, and airdrops are one of the most common purposes.

Think about it, if through the NFT perpetual designed by OrderBook, lending can become a financial behavior like securities lending, and price prediction can become an indispensable part of market expectation management, with a gorgeous identity transformation, and the lending protocol becoming a "securities dealer", isn't this a solution to provide liquidity?

The market lacks radicalism and innovation. Please put innovation in the liquidity layer on the agenda.

2. The influence of blue-chip NFTs - "Paradigm shift in monetization scenarios"

I have recently studied Paradigm's cutting-edge NFT product Art Gobbles in depth. It gave me a huge brainstorm. It was not the progressive ownership optimization they proposed (the longer the holder time, the more linear distribution of tokens), but the art scene presented by this NFT that made me feel scared.

The specific gameplay is: when you have Art Gobbles whitelist, you can mint an Art Gobbles drawing board for free. It can eat other people's paintings. All the artworks eaten by Gobbler belong to it and will be displayed in its belly gallery forever.

This kind of devourable gameplay is a natural closed ecosystem, suitable for artists or private collectors with the same attributes. They will buy NFT paintings of similar styles and set up "private galleries". NFT is inferior goods and a toy for large collectors. High-end NFTs such as BAYC are subject to royalties, and single sales are subject to great wear and tear. Once the quantity is large and they want to sell it, they are afraid of dumping it and scaring the market. Private P2P transactions are possible, but it also takes time. How to realize it "elegantly" requires new financial behaviors to take over the old routines.

Suppose that hundreds of BAYCs are swallowed up to become a bundle. If this bundle is fragmented through Bidsplit, then the process of "listing" of the private gallery is completed. This is not a new way of playing. Cryptopunk has been fragmented in the past, but that was just one. My concern is that the "trend" in the high-end NFT market will cause the trampling of blue chips. This kind of superimposed high premium can definitely use capital operations to make the market value exceed the original collection. Isn't it the essential meaning of luxury goods to keep ordinary people away from blue chips?

“Saving” is a behavioral habit, especially when you meet someone you like and can cash in “elegantly”, why not go after it?

Soul-searching question, in the era of handheld Pokémon, the joy of getting a legendary Pokémon was contagious to everyone, and collecting all the temple badges could be shown off on the streets. The same is true for NFT, except that sometimes the wealth does not meet the standard. So when the monetization scenario shifts, lending becomes less fun (except for what I mentioned in the previous article). Most of the blue chips are concentrated in the private galleries of large investors, and the possibility of blue chip lending for airdrops is much lower. If the lending track cannot open up new frontiers, it may be slowly eroded.