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The industry is stormed with unique projects that are seeking to provide users with top-notch liquidity services for NFT users, BendDAO is one such project. Here’s a detailed guide to the protocol.
Liquidity is an essential factor that cannot be ignored when determining the worth and value of non-fungible tokens (NFTs). Concerns to address this problem have seen startups venturing into the industry with innovative liquidity products. As such, BendDAO (BEND) NFT liquidity algorithm falls in the category of a notable initiative that has entered the NFT space to address issues with liquidity. BendDAO provides an NFT liquidity mechanism that seeks to meet the needs of NFT users and help resolve liquidity issues.
BendDAO is the first decentralized peer-to-pool liquidity protocol for non-fungible tokens. The protocol allows NFT owners to deposit their assets as collateral on its platform. In return, they have the opportunity to take loans in Ethereum (ETH).
Investors and users who have valuable NFTs in their wallets but are financially challenged can easily utilize the lending services proposed by BEND while they deposit their NFTs as collateral. Basically, the BendDAO crypto protocol supports instant loans backed by NFT collateral, NFT down payments, and collateral listing. BendDAO is committed to offering a one-stop solution for NFT liquidity to users within a closed loop. This can be attributed to the flexibility for using the services of listing, down payment, and borrowing. The BendDAO crypto protocol is known and widely adopted for supporting NFT collateral-backed quick loans, NFT down payments, and collateral listing.
After significant support from renowned investment and credible personalities and institutions, BendDAO (BEND) was launched in the third quarter of 2021. Some of the project’s notable supporters include Peter Thiel, Founders Fund, Bybit, Pantera, Spartan Fund, Sushiswap, Polygon, Dragonfly Capital, and many others.
After the launch of BendDAO on August 3, 2021, the DAO began to pursue the mission to build an entire economy of decentralized assets, technologies, and organizations. In a bid to achieve its determined goal, the DAO has been seen making collaborations with specialized autonomous entities. BendDAO integrates with existing projects through token swaps and tends to avoid bottlenecking of decisions by limiting governance to mandate and funding approval.
BendDAO has become a go-to platform for NFT holders who look for effective means to address issues of liquidity. Some of the core features of BendDAO include the following:
The effectiveness of BendDAO services can also be attributed to some of the products featured on the DAO, which include BendETH, BoundNFT, and the interest rate model.
The advantages of BendDAO to NFT users are enormous, a few of them are highlighted below.
BendDAO in its effort to provide optimum liquidity services for users is faced with certain challenges which tend to affect its efficiency. One notable issue with the DAO’s system operation is that it encounters situations where the borrowers refuse to pay back their loans. Meanwhile, the NFTs being auctioned off as collateral aren’t being bought because of the high prices that have been set. If sold for lesser amounts, the value may not be able to cover the loan outstanding.
Also, there are five primary key risk factors for the availability of NFT on the BendDAO system. They include:
BEND is the governance token of the BendDAO protocol. It has a circulating supply of 382,458,902 BEND coins and a maximum supply of 10,000,000,000 BEND coins. The distribution of the BEND tokens is allocated as follows:
Arguably, the BendDAO NFT liquidity solution protocol has played a very crucial role in the NFT sector as it has effectively addressed the issue of NFT liquidity without causing NFTs to collapse. Interestingly, the BendDAO (BEND) has achieved this despite still being in its early stage of development.
It has become a preferred choice for holders of non-fungible tokens as they do not need to fractionalize their holdings to benefit from intended liquidity. Hence, it is believed that the BendDAO protocol is capable of producing positive results for the evolution of NFT liquidity. This is accompanied by the certainty of a robust governance structure and even a threat assessment methodology.
BendDAO is the first decentralized peer-to-pool liquidity protocol for non-fungible tokens.
BendDAO allows NFT owners to deposit their assets as collateral on its platform while in return, it offers them the opportunity to borrow loans in ETH.
Some of the notable products featured on the protocol include NFT-backed quick loans, collateral listing, and down payments on NFTs.
BendDAO is a concern for NFT projects because these projects have their values tied to the NFT auctions featured on the protocol.
BendDAO adopts a mechanism that allows users to repay their loans within 48 hours to avoid losses. This way it guarantees adequate protection for its liquidity.
BEND is the governance token of the BendDAO protocol.