With a large number of blue-chip NFTS on the NFT mortgage platform BendDAO at risk of liquidation and many users claiming their ETH assets, BendDAO co-founder @CodeInCoffee tweeted yesterday (22) evening that the vote on Proposition BIP#9 had officially opened, with only 24 hours to go.
The aim is to modify some of the parameters of the agreement to address the liquidity crisis.
It is reported that 28 boring apes (BAYC) and 48 mutant apes (MAYC) have been liquidated in the last three days. There are still 4 BAYC, 7 MAYC and other blue chips like Azuki, Doodles, CloneX…
There’s an auction going on.
(When the health coefficient is less than 1, liquidation will be started) Proposed to modify the liquidation threshold and cancel the bid limit, which has been approved by a high vote. According to the description of proposal BIP#9, it is suggested to adjust the parameters of BendDAO protocol, including:
The lowering of the clearing threshold to 70%(gradually reduced weekly from the end of August) removing the bid limit requiring 95% above the reserve price lowering the clearing auction time to 4 hours and resetting the interest base rate to 20% is expected to help more ETH depositors earn more interest and prompt more NFT holders to repay their ETH.
The proposal is expected to close at 8 p.m. Tuesday, Beijing time.
The “yes” vote now has an overwhelming majority of 59 million veBEND/99.34%, while the “no” vote has just 0.61%.
With less than 10 hours to go before voting closes, BIP#9 should have a high chance of passing unless something else happens.
Why the emergency protocol change?
() As reported earlier, BendDAO’s clueless community sees three problems: “Blue-chip collateral selection” : The agreement basically assumes that blue-chip NFTS will at least not go to zero very quickly, but PFPNFTS are risky assets that have not been tested in time.
“Anchored floor price liquidation” : NFT liquidity can not be compared with tokens, if there are fewer buyers, sellers will be lower than the floor price order in order to sell, as long as there are more than 10 people eager to list orders, the floor price will be rapidly reduced, leading to more people hang lower prices, mortgage PFP will suddenly reach the liquidation line.
When users see more PFP to liquidate, they are more eager to sell, creating a negative cycle that has already occurred.
“Clearing mechanism is not reasonable” : clearing auction bid must be more than 95% of the floor price, otherwise the auction will not be bid, if the blue chip price does not recover for a long time, the loss will be borne by the users who put ETH into BendDAO.
As a result, there have been a large number of ETH withdrawals recently.
With more than a hundred blue-chip NFTS at risk of liquidation is the current crisis about to get worse?
According to BendDAO platform data, there are also 63 BAYC, over 100 MAYC, and more Azuki, CryptoPunks…
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If the liquidation spiral continues to drive floor prices down another 20%, all of these NFTS could be liquidated.
Remind cryptocurrency market turbulence is violent, please be careful before investment risk.