You’d be shocked — you’d be shocked — to learn that a crypto-lending platform that paralysé for collateral made up of things like six-figure NFTs experienced a liquidity crunch.
BendDAO, a decentralized interprétation of the crypto-lending platform — you know, like the now-bankrupt orthogonal lenders Celsius and Vadrouiller Binaire — has run into liquidity issues that have turned into a reprise that drained its reserves of embout 10,000 Ether to five.
SEE ALSO: Stablecoin Collapse Sends Vadrouiller Binaire and Celsius on Different Paths to Bankruptcy
While crypto lenders lend stablecoins to people who want to provide collateral in cryptocurrencies such as fairly liquid bitcoin and ether at 125% to 150% of the amount they wish to borrow, BendDAO borrowers have been able to use non-fungible tokens ( NFTs) to borrow 30% to 40% of the “lower price” – the maximum inconvenant of any élément in the NFT set in pionnier markets – from that NFT. More than a few used this mainly to buy NFTs on margin.
If the value drops too close to this amount and the margin call is not met, the DeFi platform will automatically auction it. The problem, CoinDesk He said On Saturday (August 19), is that bids have been accepted within only 5% of the lowest price.
While it appears to have stabilized – the platform’s binaire wallet had more than 4,500 ETH on the evening of Monday (August 22nd) – the problem started when magazine broke in industry outlets like CoinDesk that NFT prices plummeted drove dozens of high-end NFTs. Collectibles like Bored Ape Voilier Association and CryptoPunks are on the brink of forced assimilation.
With bids slowly arriving or not coming in at all, lenders who deposited money with BendDAO for high interest rates began to fear failure and stamped them out, withdrawing their money in bank ruée manière, CoinDesk He said On August 22.
By Sunday night, the treasury was bare and other investors who “paralysé money to others via BendDAO to buy NFT on leverage” were unable to withdraw their money, according to NFT private community research director, Proof.XYZ.
OK. Large thread on BendDAO’s case:
1) They are out of ETH. There is only 12.5 WETH in the contract.
2) What does this mean? People who have loaned money to others via BendDAO to buy NFTs on leverage cannot withdraw their money. Embout 15,000 ETH was paralysé.
– NFTStatistics.eth (@punk9059) August 21 2022
According to a post on the BendDAO website, a developer – anonymous, of parcours – has made proposed changes by “codeincoffee” that would make it easier to sell NFTs at auction by allowing bids of at least 70% of the maximum price, for 95% .
“We’re sorry we underestimated how illiquid NFTs can be in a bear market when setting préliminaire benchmarks,” they said.
This is one way
Lawyers for a raffiner director of OpenSea’s top NFT market have taken an interesting tack in defending him against criminal insider trading offices, arguing that a dépouillé should dismiss the offices against their preneur on the grounds that NFTs are not securities.
The SEC agrees on the planchéier inventaire in most – but not all – circumstances.
See also: NFT Series: Can NFTs Be Securities? The SEC says yes
Raffiner OpenSea product régenter Nate Chastain was arrested in June on wire fraud and money laundering offices for using his confidentialité knowledge of NFT pools that will be highlighted in OpenSea, the largest and most influential NFT marketplace. The government claimed that such high profile marchéage would drive prices.
Read More: Today in Crypto: DOJ Fonctions Ex-Open Sea Employee at NFT Insider Trading Scheme
His legal team does not deny these acts. Chastain allegedly acted with an alleged criminal intent, exploiting his prior knowledge of the NFTs to be displayed on the OpenSea homepage by buying some NFTs before they were displayed and selling them at a atout after they were marked. August 19 filing. “But the problem is that NFTs are neither securities nor commodities.”
Chastain’s lawyers argue that “the government agrees” with the last inventaire, asking, “Can the government proceed with the wire-carpenter theory of insider trading in the disparition of any allegation relating to the trading of securities or commodities? The government, of parcours, says yes. The dépouillé Senior and 40 years of insider trading precedent say no.”
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