In the midst of the credit crisis, NFT Lending Protocol Bend DAO proposes urgent changes!

The Bend DAO development team apologizes for underestimating how illiquid NFTs might be in a bear market when establishing the initial parameters.

In an effort to stabilize the ecosystem, Bend DAO, the team behind the decentralized nonfungible tokens (NFTs) borrowing and lending protocol, put forth new emergency measures on Monday.

The project only had 15 wrapped Ether (wETH), worth $23,715, to repay lenders, it was revealed that day. With the help of the mechanism, about 15,000 ETH were lent.

The Bend Dao development team proposed that the liquidation threshold for collateral be limited to 70% of the loan value, down from 85%, to prevent the protocol from experiencing a credit crisis.

Next, the platform would shorten the 48-hour NFT auction period to four hours.

The minimum bid price for NFTs on Bend DAO would then no longer need to be tethered to 95% of the floor price on the well-known digital collectibles trading platform OpenSea.

The current 100% loan interest rate will be reduced to 20%.

The BendDAO treasury would also have the authority to use revenue to pay off bad debts.

Many NFTs are in danger of being liquidated as a result of the bear market's collapsing floor prices for NFTs, which have occurred even among reputable collections.

Some users might find it more cost-effective to simply let go of their digital collectibles (which are also losing value) rather than paying back the debt, leading to bad loans, as interest rates on "debt-secured" NFTs have skyrocketed to almost 100%.

Thirdly, there may not be bids during an NFT's liquidation process because NFT markets are less liquid than coin or token markets, which heightens the death spiral.

Before credit problems started, Bend DAO was regarded as a top-tier NFT borrowing and lending platform.

The vote on the current proposal will last for 24 hours and has received 99.23% of the necessary quorum of 47 million veBend.

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