Loaned Bored Ape on BendDAO at risk due to death spiral

BendDAO, a P2P lending platform, is at risk of liquidating loaned Bored Ape NFTs, exchanged for Ether (ETH), after floor prices dropped on the OpenSea marketplace. Crypto analysts warn BAYC holders.

OpenSea’s trading volume has drastically dropped causing a decrease in NFT floor prices. BAYC, the best-selling NFT collection, dropped 72 ETH, causing a drop in health levels under 1.1 as well.

According to @xDoubleQ, BendDAO data shows it holds 272 Bored Ape NFTs, 309 MAYC NFTs, and other NFTs. Altogether, 30,300 ETH or $55 million worth of NFTs is at risk of being liquidated on BendDAO.

In case liquidation happens, the entire BAYC ecosystem and NFT industry will face the consequence. There seems to be no hope to save from liquidation as OpenSea’s trading volume dropped 12-month low.

Many Bored Ape users loan out NFTs as collateral in exchange for NFTs, at BendDAO it’s 40% of each NFT supply worth Ethereum. Holders then use the money to trade on the crypto market for more profit.

In past months, many crypto lending platforms went bankrupt or liquidated due to low NFT volumes or bear market. Now, BendDAO is coming under the death spiral as NFT health levels drop below 1.2.

BendDAO currently holds 2-3% of BAYC supply but once other BAYC NFTs go out on auction together, the floor prices are likely to drop, risking the collateralized NFTs on the P2P lending platform.

As of now, the BAYC floor price trades at 71.71 ETH ($121k) on OpenSea.