In the weeks since leading non-fungible token (NFT) marketplace Blur released its lending platform Blend, it has taken 82% of total lending volume market share.
According to a report from blockchain data aggregator DappRadar released on Wednesday, in its first 22 days, Blend accumulated 169,900 ETH, or about $308 million in trading volume. During that same time, the trading volume across all lending platforms reached about $375 million.
On the date of its release, the platform experienced 4,200 ETH, or roughly $7.6 million, in lending volume – meaning, Blend has seen a 3,945% increase in its trading volume in just under a month.
In the same time period, total NFT market trading volumes reached $466 million, according to DappRadar, signaling a shift in attitudes from NFT ownership to NFT lending. Additionally, 46.2% of Blur’s total trading volume is now from lending.
Sara Gherghelas, a blockchain data analyst at DappRadar, told CoinDesk that while Blend’s success is promising for driving capital into stagnant NFT markets, it comes with its own concerns for the market’s maturity and its impacts on collection prices.
“The significance of this large volume can be positive, as it indicates liquidity and market validation,” said Ghergelas. “However, there are also potential negatives, as high volumes on Blend could increase the price volatility, impacting market stability and making it difficult for traders to predict price movements accurately.”
The report also notes that since Blend’s launch, Blur’s total value locked (TVL) has increased from $119 million to $146 million. However, it says that wash trading remains a concern and that $19 million of that has been wash traded just in the past week.
“The significance of this number is that it raises concerns about the legitimacy of the trading volume on the Blur platform and also on the entire NFT industry,” said Ghergelas. “It is important for platforms and participants in the market to maintain transparency and avoid engaging in manipulative practices that can mislead market participants, especially if we want a wider adoption of NFTs.”
Blur rolled out Blend, Blur Lending, on May 1, to court traders who couldn’t afford to purchase an expensive blue-chip NFT upfront. However, a handful of collectors raised concerns that new traders may not be aware of changing market trends, and thus face liquidity issues when paying off their loans.
According to data platform Dune Analytics, Blur has amassed a trading volume of over $120 million in the past week, while runner-up marketplace OpenSea is trailing behind at nearly $37 million. Meanwhile, Opensea leads with nearly 59,000 active users, while Blur follows with about 26,000.