New emergency measures have been introduced by Bend DAO to deal with ongoing credit crisis.
Bend DAO Proposes Ecosystem Stability
It was on Monday, when Bend DAO announced that it had proposed measures to deal with credit issues on an emergency basis. Bend DAO introduced the new emergency measures on Monday.
CypherMindHQ.com Artificial Intelligence Crypto Trading System - Surpass the competition with this cutting-edge AI system! Utilize the prowess of innovative algorithms and amplify your crypto trading strategies with CypherMindHQ. Learn more today!
While proposing emergency measures, Bend DAO announced that they were introduced to achieve stability of the cryptocurrency ecosystem.
Bend DAO is a major lending and borrowing protocol, which is also responsible for the development non-fungible tokens (NFTs) that are decentralized in nature.
On the same day, Bend DAO revealed that the funds it owed to the lenders was just 15 Wrapped Ether (wETH). The 15 wETHs it owes to the lenders amount to $23,715.
Once the network pays back lenders, it will owe nothing to any client or user.
Initial ETHs Lent to Bend DAO
According to the data, the new emergency measures introduced by Bed DAO are the ones it used acquire loan of approximately 15,000 ETH.
The network was reportedly going through a downtrend and the development team behind Bend DAO came up with resolution.
They suggested that the threshold of liquidation should be constrained in order to deal with the credit crisis.
CypherMindHQ.com Artificial Intelligence Crypto Trading System - Outpace the competition with this high-end AI system! Leverage the capabilities of progressive algorithms and enhance your crypto trading performance with CypherMindHQ. Learn more today!
The necessary changes were made as advised by the development team, which reduced the threshold by 15%. Prior to the change, the liquidation threshold was 85%, which has been reduced to 70%.
Reduction in the Auction Period
Following the implementation of the first emergency change, the next step is to reduce the auction time for non-fungible tokens on the platform.
For the second step, it has been suggested that the auction time for the non-fungible tokens is to be reduced from 48 hours. The proposed NFT auction reduction time is 4 hours.
If the bidding period is reduced, then the NFTs’ minimum bid price requirement would be removed. The requirement will be removed from OpenSea when placing bids through Bend DAO.
OpenSea is a major and popular trading platform for digital collectibles and non-fungible tokens.
Reduction on Loan Interest Rates
Another proposal is the reduction of interest on loans. At present, the interest rates on loans are 100%. If the proposal is followed, then the interest rate on loans would be reduced to 20%.
If the proposal is followed, then the network will be empowered. This would allow the Bend DAO platform to clear all the bad debts. Additionally, the network will be able to generate stronger revenues.
Ever since the launch, Bend DAO has been considered as a blue-chip lending and borrowing platform for non-fungible tokens. The platform had been the top priority before it ended up facing credit issues.
If the platform follows the proposal, it will be able to sort out the revenue as well as the credit issues.