Last month, Blur NFT marketplace launched their “BLEND” lending protocol to mixed reactions from the space. Blur’s new lending protocol has sparked interest among users seeking financial gains within the NFT marketplace. While it is crucial to note that making money through loan interest is unlikely due to low interest rates, alternative avenues exist for potential profits.
How to (Possibly) Make Money on Blend
Before we continue, please note that these observations are subject to high risk for users. Please proceed with caution and consider the risks and research involved before making market decisions. Below is a possible way users may earn more by lending money on Blur.
- Opportunity in Buy-Outs: The focal point of this strategy revolves around identifying called loans with attractive buy-out prices.
For example, consider a loan for an Azuki NFT, numbered #5770, currently on auction with a buy-out price of 13.92E. By acquiring this loan, calling it, and if the borrower fails to repay within the allotted time, the Azuki NFT can effectively be obtained for 13.92E.
- Increasing the Chances of Success: To maximize the likelihood of success, it is advisable to target loans with high APY. These loans accumulate debt at a faster pace, eventually reaching a point where potential lenders hesitate to engage in buy-outs due to the associated risks.
- Strategic Timing: The objective is to acquire the loan at a price that allows the debt to match or exceed the current floor price. This minimizes the probability of being bought out when calling the loan, as it involves substantial risk for potential buyers.
- Profit Realization: Upon successful liquidation, the Azuki NFT can be sold. Assuming the floor price remains stable, selling the acquired NFT at, for instance, 14.5E would result in a profit of approximately 0.6E.
What Does this Mean for Blur Marketplace Users?
Blur’s new lending protocol presents users with opportunities for profit within the NFT marketplace. While earning money through loan interest may not be feasible, strategic buy-outs of called loans offer an alternative avenue. By analyzing loan trends, identifying appealing buy-out options, and timing the process effectively, users can potentially capitalize on market inefficiencies.
This article takes notes from 333 Club Ambassador @DancingEddie’s observations to learn how you can earn more from the platform. By analyzing loan trends and strategically participating in buy-outs of called loans, users can explore new opportunities within Blur’s ecosystem. In case users have trouble navigating the platform, here are a few pointers from @DancingEddie to navigate the marketplace.
Note: It is crucial to understand the associated risks and make informed decisions. As with any investment, thorough research and careful consideration are essential to navigate this emerging landscape successfully.
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