Bored Ape, Nearly $55M CryptoPunks NFTs Risk Liquidation Amid Debt Crisis
Many owners of precious Bored Ape Yacht Club (BAYC) and CryptoPunks Nonfungible Tokens (NFTs) that they used as collateral for borrowing in Ether (ETH), could not repay their debts. The situation could lead to the first massive liquidation event of the NFT sector.
DoubleQ, the founder of Web3 launchpad Double Studio, says lending service BendDAO could liquidate up to $55 million worth of NFTs to pay off its loans amid fears the so-called “health factor” of that debt could fall below 1 could fall.
BendDAO’s NFT liquidation protocol. Source: BendDAO official website distribution of NFT holdings. Source: doubleQ
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