Lending protocol BendDAO has run out of Wrapped Ether (wETH) in its contract. At the time of writing, the contract has only 15 WETH to pay the lender, estimating the remaining 15,000 Ether (ETH)
NFTStosystem.eth researcher dissected the issue in a thread on Twitter, emphasizing that NFT borrowers in the platform now have to pay 100% interest on the ETH they borrowed. In addition, NFTs-based debts are also on the rise.
Furthermore, the researcher noted that many NFTs have been used as collateral, and there are currently no bids. Related to this, there are more NFTs on the platform’s warning list, which are NFTs that are about to default and are auctioned due to falling NFT floor prices or rising debt and high-interest rates.
While you were asleep the BendDAO bank run finally happened
15 wETH ($25,081) left in the wallet that had 18,000 ETH ($29,160,000) in it just 48 hours ago
Still 14,500 wETH owed to lenders….
Absolute shitshow pic.twitter.com/RKkdqVAVIf
— Cirrus (@CirrusNFT) August 21, 2022
According to the BendDAO co-founder, their team is implementing a proposal to change the parameters in the NFT lending platform. The update will take effect 24 hours after approval through the voting process.
In the midst of the crisis, one Twitter user took the opportunity to laugh at the platform, pointing out that even the BendDAO co-founder was about to be liquidated by their own lending platform.
Last week, analysts speculated that there could be a series of $55 million NFT liquidations to recover loans on BendDAO. According to DoubleQ, the founder of Double Studio, the situation could lead to a “death spiral” for the entire NFT market and the Bored Ape Yacht Club (BAYC) ecosystem.
Meanwhile, the wider NFT world doesn’t perform better. Currently, as the floor price of BAYC and Mutant Ape Yacht Club (MAYC) collections plummets, the newly launched GameStop NFT marketplace has enjoyed success, with daily fee revenue dropping below $4,000.