🔥NFT Lending Dominance: Blur Takes 82% Market Share!

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Here are key highlights of this week:

• 🔥Blur dominates NFT lending

• 💳STEPN integrates Apple Pay

• 🤔Tokens in games—Yes or No?

Let’s get started!

🔥Blur Dominates NFT Lending

A little context first:

Blur has launched a peer-to-peer lending protocol called Blend.

Instead of using lending pools, Blend will connect lenders and borrowers to decide on interest rates and other loan parameters.

What sets apart Blend from others:

• No loan expiries ⌛

• No oracles 🔗

• Higher yield 💸

• No governance dependency 🗳️

As a result, the lending pool becomes an attractive option for traders to make arbitrage plays with less capital and borrowers to increase capital efficiency.

So what has the growth been like?

In just 22 DAYS, Blur’s Blend protocol has taken 82% market share of the NFT lending market.

Here’s some data for you (from DaapRadar):

- Loan volume hit $308 million (for context, another notable lending player BendDAO has taken over a year to hit $300 million)

- Azuki, CryptoPunks, and Milady Maker contributed to majority of the loan volume

- 16,000+ loans were taken on Blend

Since launch, Blend continued to add more collections that users can buy using the buy now, pay later mechanism. Some of the recent ones include Clone X, DeGods, Pudgy Penguins, Kanpai Pandas, and Beanz.

Now the real question—what’s driving all this growth?

Incentives (haha, I know it’s not a surprise!) 😁

While there’s no doubt Blur has done a phenomenal job at strengthening their market position by introducing a new dimension to NFT trading with Blend, we still can’t ignore the incentive strategies that are potentially driving most of the volume.

Whenever a lender takes over a loan, they are incentivized to keep the interest rates low (in many cases, it was even 0!). This will result in more smooth financing for borrowers and drive more growth.

Now let’s get to the risks before we move on

Liquidation cascades. That’s the risk we should be worried about.

If too many people who can’t afford to buy a certain NFT buy them, it may result in too many defaults and tank the floor price. This may again lead to some panic selling in the short-term.

So we should be aware of the risks before interacting with lending protocols like Blend, regardless of the innovative features being shipped.

💳Stepn Integrates Apple Pay

First of all, why’s this so significant? 

Apple has been pretty strict when it comes to NFTs and crypto. Last year, they introduced a 30% tax on NFT purchases through its app store. So it was really hard to tap into a mass user base of over a billion.

So what changed their stance?

Well, the whole tax mandate was ruled illegal by the federal court. They also started accepting more Web3 games like Axie Infinity on its App Store.

With games on the App Store, it should not be treated as a flex. What matters is accessibility and visibility. It gives the games more room to be discovered by new players and reach new heights.

Now what’s the deal with STEPN?

In the case of STEPN, the app is not only getting visibility from being on the App Store, but also lowers entry barriers with Apple Pay integration.

For those who don’t know, STEPN is a move-to-earn app where you have to buy Sneaker NFTs and you can start earning some reward tokens. Now to purchase these NFTs, you can simply use Apple Pay instead of going through exchanges and crypto wallets.

Here’s how it works:

- You add your credit/debit card to your Apple Wallet.

- Go to STEPN’s in-game marketplace.

- Buy SPARK credits (1 SPARK = $0.1)

- Buy your desired NFTs

It is definitely a landmark milestone for the app because no one needs to care anymore about gas fees or anything that screams Web3.

As for us, we would pay attention to how many downloads this integration will add and how many will use Apple Pay.

🤔Tokens in Games— Yes or No?

A hot topic on crypto Twitter right now is around gaming tokens.

While one group argues that tokens are completely unnecessary for games, the other group advocates for tokens as they bring liquid nature to assets and other utilities.

Let’s understand both sides of the argument before we make a decision.

Argument for 🙅‍♂️ Tokens

In general, people don’t want to have a token associated with games because of what happened with Axie Infinity.

We all saw it. Initially, the token rallies as player demand goes up and rewards are juicy. But as soon as hype dies down, the sell pressure increases and token value plummets.

In addition to poor tokenomics, there may not be a real reason for having tokens in games. Currently, games are launching tokens for three main reasons (as highlighted by Vader):

- Fundraising

- Incentive alignment with players

- Payment currency

However, games are not sustaining growth or activity in any form to support these reasons for launching a token.

Why? It's because they can’t capture value. If a player continues to sell his tokens and only extract value, it will only create a death spiral.

And staking and buybacks make no sense long-term.

Along with unsustainability being an issue, there’s also the user experience problem. Why would any player go through the hooks to simply buy in-game tokens that have no significant impact on the gameplay? Just doesn’t make sense!

So this is an argument we can make for not having tokens. Now let’s see what the other side of this debate looks like.

Argument for 👍 Tokens

While tokens add new risks to the system, there are few positives for having them as well.

Here are some:

- Tokens are liquid in nature compared to NFTs, making it easier to create fractional rewards

- Can help grow a game from 0 to 1 in a short period

- Having tokens gives devs flexibility to have grants and other innovative programs

I know. The case for having a token looks weak right now.

But you have to understand that we are in uncharted territory here. There is no proper token design that added value, sustained long enough, and brought in new audiences outside Web3.

So we can’t deny gaming tokens completely. And what’s needed is a robust token design that focuses on value accrual and sustainability.

Game Updates

• Gods Unchained released a 2023 roadmap with a new content creator program, game modes, pack openings, and much more…!

• Metal Core announced a playtest over this weekend with exciting prizes up for grabs.

• The Grapes announced the mint date for GRAPES NFTs will be May 31st, 2023.

• Planet Mojo revealed the summer roadmap and expects to release the full game and Season 1 by July.

• Bullieverse revealed a new art upgrade for the Citizens of Bulliever Island NFT collection.

• Illuvium: Zero Alpha Season 1 is live. To start playing, you need to secure at least one land plot.

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