Azuki “Bringing Collapse” NFT Market, taking stock of bad debt caused by NFT lending protocols.

Azuki is assessing bad debt from NFT lending protocols in their "Bringing Collapse" NFT Market.

The NFT market has experienced a complete collapse, leading to bad debt and liquidity crises on NFT lending platforms. Crypto KOL Loki has taken stock of the bad debt situation on mainstream NFT lending platforms and their subsequent handling plans.

Bendao has around 20E of floating bad debt, with 8 Azuki debts that exceed the floor price. In addition, there are 14 Doodles that have entered the liquidation pool but have debts less than the floor price. BlockingrasBlockingce has 13 debt positions with floating bad debt, totaling $109,700 (equivalent to 56E), mainly for Azuki and MAYC. In addition, 15 debt positions have entered the liquidation pool but have debts less than the collateral value, with a total collateral market value of $582,700 and a total debt of $439,000.

Blur roughly counted that 19 Azukis have defaulted, and another 91 Azukis have entered the liquidation process but have debts less than the collateral value. 25 MAYCs have defaulted, and another 57 MAYCs have entered the liquidation process but have debts less than the collateral value. In addition, BeanZ, BAYC, and Pudgypenguins have more obvious bad debts.

Overall, the severity of Blur’s bad debts is greater than that of BlockingrasBlockingce and Bendao, with Azuki system debts greater than BAYC and other blue chips, and Punks being the least affected. Follow-up actions: Bendao initiates a vote on whether to use the treasury assets to liquidate bad debt NFTs; BlockingrasBlockingce responds: 1) there are bad debts, but the platform’s reserve funds are probably enough to balance the accounts; 2) there are still people actively participating in liquidation, and this wave in the morning will take some time to clear.

Reference: https://twitter.com/Loki_Zeng/status/1675740170161917952

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