BendDAO Liquidity Crisis
NFT mortgage lending agreement BendDAO has seen a large number of liquidation auctions and the platform is experiencing a severe liquidity crisis. This indicator provides an update on the BendDAO liquidity crisis.
BendDAO Releases New Proposal BIP#10 to Adjust Liquidation Thresholds and Auction Cycles in a Phased Vote
KingData News: The NFT Liquidity Protocol BendDAO community has released a new proposal, BIP#10, to adjust the liquidation threshold and auction cycle in a phased ballot. In particular, when the liquidation threshold reaches 80%, a ballot for 75% of the liquidation threshold will be launched on September 6, and a new ballot for 70% of the liquidation threshold will be launched on September 13. In addition, BendDAO will launch a ballot to change the auction cycle from 24 hours to 12 hours on August 30 and a ballot to change the auction cycle from 12 hours to 4 hours on September 6.
BendDAO's Proposal to Adjust Liquidation Thresholds and Other Parameters to Mitigate The Liquidity Crisis Was Adopted
KingData News: The proposal initiated by the NFT liquidity protocol BendDAO to propose a solution to the liquidity crisis by adjusting the liquidation threshold, auction cycle, interest rates and other parameters has now been adopted. These include a phased final adjustment of the clearing threshold to 70%, an adjustment of the auction cycle from 48 hours to 4 hours, and an adjustment of the ETH base rate to 20%.
BendDAO's First 2 BAYCs Have Been Cleared, vs01.eth Address Bid and Purchased
KingData News: BAYC floor price falls below 70 ETH, BendDAO liquidates through auction mechanism, the first 2 BAYCs have been liquidated. The vs01.eth address was up for bid and purchased BAYC842 for 82.64ETH and BAYC7860 for 68.69ETH respectively. The liquidation mechanism of BendDAO is an on-chain auction rather than a market sale, which reduces the risk of serial liquidation to a certain extent. Currently about 40 BAYC health factors are less than 1.1 and about 70 are less than 1.2.
BendDAO may see BAYC floor price drop due to cascade liquidation, new proposal may be risky
KingData News: Blockworks Research tweeted an analysis of the reasons why BendDAO affected the decline in BAYC floor prices. It is noted that the cascading liquidation mechanism designed by BendDAO may be problematic. Cascading liquidations occur when the auction decreases the market value of the underlying collateral, leading to another loan reaching the liquidation threshold. The domino effect of auctions forcing more liquidations can drive the underlying's price down tremendously. With BendDAO, when the valued borrowed surpasses 90% of the floor price for an NFT, the NFT is auctioned off. 28 bored apes and 48 mutant apes have been liquidated and auctioned in the last 3 days! 3 more BAYC and 12 MAYC are in auction now. The liquidations have led BAYC to a 30 day volume high and a small but significant drop in the floor price. MAYC has seen a similar result. If the cascading liquidations continue to drive the floor prices down another 20%, all of those NFTs will be liquidated. BendDAO has a stipulation that bids in their liquidation auctions must be a minimum 95% of the floor price. This helps curb some risk of a death spiral but leads to depositors potentially getting stuck with NFTs that have a falling value (bad debt).
BendDAO's Lending Rates Have Topped 100% Due to Lack Of Liquidity
KingData News: As a large number of blue-chip NFTs on the NFT collateral lending platform BendDAO face a liquidation risk crisis, the ETH lending rate on the platform has risen to 101.69%, according to its website. The Ether deposit rate, on the other hand, reached 84.96%, while the ETH on the BendDAO platform recently showed a net outflow.
BendDAO's New proposal Proposal Proposes To Adjust Liquidity Thresholds, Auction Cycles, Interest Rates and Other Parameters to Ease The Liquidity Crisis
KingData News: NFT Liquidity Protocol BendDAO launches community proposal to address liquidity crisis by adjusting liquidation thresholds, auction cycles, interest rates and other parameters. These include a phased final adjustment of the clearing threshold to 70%, an adjustment of the auction cycle from 48 hours to 4 hours, and an adjustment of the ETH base rate to 20%.
BendDAO Has 28 NFTs in Liquidation Auction, Involving Four Categories Such as BAYC
KingData News: The NFT collateralized lending agreement BendDAO has 28 NFTs in liquidation auction, involving four types of BAYC, Doodles, MAYC and Clone X. These include: 2 Bored Ape Yacht Club, 7 Clone X, 6 Doodles and 13 Mutant Ape Yacht Club. In previous news, cryptocurrency analyst Cirrus tweeted that the NFT lending market is at serious risk of liquidation.