The floor has dropped yet again.
The NFT market has been a bit lackluster lately as the bear market continues to make the sector see a decline in sales and revenue. Recently several owners of Bored Apes and Mutant Apes have borrowed against their NFTs and fear of liquidation has some on edge.
The news came shortly after it was announced via twitter that a user had a Bored Ape up for auction. The floor price of BAYC is currently 72 ETH and BAYC #533 was used as collateral for a loan of 66.95 ETH. The scary part was the fact that this NFT has now been listed for auction.
No one has made a bid on the NFT but there are other Apes on the BendDAO platform as well.
BendDAO is a peer-to-peer NFTFi protocol where users are able to borrow ETH against the floor price of their NFTs. A holder can borrow up to 40% of the floor price of their NFT.
There are many NFTs on the platform and it seems a lot are in trouble. The above thread goes through that peril.There are 45 BAYC in what would be known as “the danger zone” which states they are close to being auctioned off.
This liquidation of BAYC NFT may create an issue where the floor price can drop significantly or “tanks”. Many users are comparing this situation with that of Celsius or Voyager and state a possible copycat crash could be in the works.
As debtors are unable to pay loans NFTs are auctioned off and those apes on the platform seem to be very close to that situation.
One of the biggest surprises is the co-founder of BendDAO
The co-founder of BendDAO is also very dangerously close to being liquidated. This is a situation that requires close attention and many eyes will be watching for the time being. It is hard to believe that a project as strong as BAYC could possibly go the same route as Celsius or Voyager but many assumed those platforms couldn’t fail as well.