Blur Adds Partial Repayment Feature for Blend Loans
Blur announced that the platform now has a partial repayment feature for the Blend protocol.
The Deets
- For NFTs bought with BNPL, you can now borrow ETH and pay back the loan in small increments over time instead of all at once.
- If your loan gets called, you can extend it by paying down as little as 0.1 ETH instead of repaying the full amount at once.
- This can also be used to refinance your loan for a better interest rate.
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To extend your Blend NFT loan, drag the Repay Amount slider whenever you repay to customize the amount.
❗ Why It Matters
The idea of borrowing at a near 0% interest rate to buy a blue-chip NFT always seemed crazy (and just another outlet for $BLUR farmers). Especially for the higher-priced collections. It just didn't make sense that you could buy a BAYC or CryptoPunk on an indefinite loan with only a couple ETH as a down payment.
And getting liquidated and losing the NFT when (not if, but when) the lender called the loan made the consequences of BNPL a tough pill to swallow for prospective buyers. Because when the lender did inevitably call the loan, it entered a Dutch auction process to automatically be picked up by other open loans in the pool with similar terms (unless none exist, which happens when the floor price of the collection sees a decline, in which case the loan is liquidated).
So being a borrower on Blend was a risky business, with the downside potential being 100% of your investment. In reality, you were buying the NFT with the intention of selling it if the floor price went up, rather than paying it down over time like a house or car.
🖼️ The Big Picture
Time will tell if this partial repayment feature changes the landscape meaningfully for borrowers. Blur wants to incentivize more users to utilize Blend, but is there enough lending liquidity in the ecosystem for users to use BNPL at attractive rates?
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