Currently, NFT trading volumes on the world’s largest NFT market like OpenSea are declining dramatically each day. because of the fear that The market bubble is about to explode.
According to DappRadar, NFT trading volume fell as much as 99 percent as transactions amounted to nearly $5 million during August 28. It was below the May 1 transaction value of $405.75 million, the highest on record.
In addition, the number of people entering the NFT market has also decreased significantly. This included a steadily decline in daily transactions over the past several months. What is clearly reflected is the price of popular NFTs.
For example, the price of Bored Ape Yacht Club dropped more than 53% to 72.5 Ethereum (ETH) on August 28, compared to a high of 153.7 ETH on May 1.
Similarly, the Floor price of CryptoPunks, another leading NFT collection, also dropped nearly 20% from its July high of 83.72 ETH.
The NFT bubble is exploding.
It is better known that most of the giant NFT currency is ETH, and the drop in the price of ETH will also bring down the price of the NFT.
And the slump in Ethereum’s price appears to be one of the main factors behind the poor NFT record, now that the price of 1 ETH has dropped from $4,950 in November 2021 to below $1,500 in the month. August 2022
BendDAO Votes to Improve NFT Liquidity
Last week, BendDAO, a decentralized autonomous organization. It proposed allowing NFT owners to collateralize their digital collectibles for a loan (in ETH) worth 30% to 40% of the floor NFT price, after which it voted to change the protocol code to make NFT more liquid collateral.
Voting takes place After an increase in the price of Eth, the value of ETH loans in dollar terms will increase. Conversely, a falling NFT price will lower the value of the collateral held by BendDAO.
As a result, BendDAO is facing its own debt crisis. Borrowers were unable to pay off dollar-denominated loans due to lower ETH prices, while lenders found that It is difficult to recover the loan amount. due to lower collateral value.
BendDAO’s latest vote has changed the threshold for liquidation or loss of NFT collateral from 95% to 70% to attract more borrowers’ NFT collateral.