See Ad Disclosure
A series of Bored Ape Yacht Club (BAYC) loan liquidations on NFT liquidity pool BendDAO could wipe out the entire NFT market, warned pseudonymous crypto analyst “doubleQ."
What Happened: BAYC holders that deposited their NFTs on BendDAO in exchange for short term Ethereum ETH/USD are at risk of being liquidated and losing their assets, as per data from BendDAO.
BAYC loan deathspiral starting pic.twitter.com/k4DZ0z4TSn
See Also: WHAT IS BORED APE YACHT CLUB?
BendDAO is a peer-to-peer decentralized lending platform for NFTs. Users could deposit their Bored Ape NFTs on the platform as collateral and get a loan worth up to 40% of the NFT’s value.
As the price floor for the BAYC collection has dropped to 72 ETH, as per data from CryptoSlam, the health factor of those who deposited their Bored Apes have fallen to health levels under 1.2, suggesting a mass liquidation event is likely to unfold.
5/ BendDAO currently holds 272 BAYCs (2.72% supply) and 309 MAYCs (1.59% supply)
Other platforms also have a fairly large amount of near liquidation loans
Liquidation will cause a death spiral for the BAYC ecosystem and NFT market as a whole. pic.twitter.com/m4s1ciZQ99
“Opensea volume is at the lowest point ever in the last 12 months. There's simply not enough volume to save these liquidations,” doubleQ said on Twitter. “It's inevitable.”
If you hold a BAYC you consider getting out before the defend falls. Which is >65 eth.
Once 64eth floor price is hit, death spiral will start. Dm or msg if you need a private talk. #baycdeathspiral #bayc
Although BendDAO accounts for just two to three percent of BAYC supply, the implications of the liquidations could still add a significant amount of pressure to the underlying collection’s floor price.
And that will cause the floor price to drop causing more apes used as collateral to come on the auction block.
See Also: Ethereum Co-Founder Vitalik Buterin: Millions Of People Have Crypto Wallets To Trade Monkey Pictures
Price Action: At press time, ApeCoin APE/USD, the native token of the BAYC ecosystem, was trading at $5.61, down 8.6% over 24 hours.
Bitcoin BTC/USD, Ethereum ETH/USD and Dogecoin DOGE/USD were trading at $23,100, $1,184 and $0.075, respectively.
© 2022 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Ad Disclosure: The rate information is obtained by Bankrate from the listed institutions. Bankrate cannot guaranty the accuracy or availability of any rates shown above. Institutions may have different rates on their own websites than those posted on Bankrate.com. The listings that appear on this page are from companies from which this website receives compensation, which may impact how, where, and in what order products appear. This table does not include all companies or all available products.
All rates are subject to change without notice and may vary depending on location. These quotes are from banks, thrifts, and credit unions, some of whom have paid for a link to their own Web site where you can find additional information. Those with a paid link are our Advertisers. Those without a paid link are listings we obtain to improve the consumer shopping experience and are not Advertisers. To receive the Bankrate.com rate from an Advertiser, please identify yourself as a Bankrate customer. Bank and thrift deposits are insured by the Federal Deposit Insurance Corp. Credit union deposits are insured by the National Credit Union Administration.
Consumer Satisfaction: Bankrate attempts to verify the accuracy and availability of its Advertisers’ terms through its quality assurance process and requires Advertisers to agree to our Terms and Conditions and to adhere to our Quality Control Program. If you believe that you have received an inaccurate quote or are otherwise not satisfied with the services provided to you by the institution you choose, please click here.
Rate collection and criteria: Click here for more information on rate collection and criteria.
