Hi HODLers and NFT collectors,
The Ethereum price floor or Bored Ape Yacht Club has fallen to 65.68 ETH! These levels were not seen since January 2, 2022. Since the collection reached an all-time high of 153.7 ETH on May 1, it has been on a clear downtrend.
It still means that the floor price is upwards of $100,000.
The talk of this weekend BenDAO and its potential liquidations...
BenDAO is a peer-to-peer lending service. It works as we coins, you put your APE as collateral and you borrow against it.
So users can take out loans up to 40% of an NFT's floor price.
Everything goes great until... your loan health level is upward of 1. When it dips lower, you get liquidated.
But how does it work with such illiquid assets?
Well here is how it works:
the NFT is placed in a 48-hour auction and sold to the highest bidder if the loan isn’t repaid.
As this tweet shows:
Current BAYC situation?
- BAYC floor price down 57% from ATH and
- 2.57% of the BAYC collection is on BenDAO
This coupled with the current slumpy NFT market; we could have some cascading liquidations very soon.
I do not believe this is an issue for the overall market but this is another negative narrative that news outlets might use against the overall space.
Many other collections are probably in the process of having some HODLers liquidated.
You can find the latest NonFungible.com's Q2 2022 industry report here
What are your thoughts on the matter, are NFTs dead?
Stay safe out there and stay away from leverage!
Source: Bored Ape Yacht Club NFTs Ethereum Floor Price Drops to 8-Month Low, Decrypt