DeFi

Ever looked at @blur_io's lending UI and nope'd out?

Well have a seat because I had to figure it out in the process of mapping out a taxonomy for lending protocols.

First, we gotta understand Blur's lending mechanism.

Loans are p2p, at a fixed rate, in perpetuity. The borrower can repay anytime.

The lender can trigger an auction any time to exit. When triggered, the new rate starts at 0 and climbs until a new lender steps in. The new rate can be 👇 or 👆 than the old rate.

Casts about defi, ml, food, Singapore, etc. @alliance | ex: quant @twosigma @appfolio by acq

If nobody steps in for approx 24h, the loan is defaulted and the NFT collateral is given to the lender.

Ok so how does that translate into their UI? Every NFT collection will have a chart like this:

Although intimidating at first,  it actually packs a lot of info.

The horizontal grey lines are loan offers. They show how much interest the lender charges if the borrower takes out the loan. For in this example below, if you wanted to take out a 23 eth loan, the best offer right now would cost you 10% in APR.

Similarly, the grey dots are loan auctions. They are loans whose lender wanted out and need a new lender.

Remember auctioned loans climb in interest rate until filled. So those grey dots are slowly rising. When a grey dot hits anywhere on a grey line, that is a filled loan.

You can to visualize the top of the book:

Finally, the green dots are active loans where a borrower and lender are happily engaged at that loan size and interest rate.

The circled loans look confusing on the chart. They could be instantaneously refinanced at a lower rate since there are tons of offers at lower rates.

So either 1) the borrower is oblivious, or 2) the borrower and the lender are actually the same person and they are farming Blur rewards.

A quick check shows the NFTs are all owned by the same address. It’s probably 2.

Now you too can read Blur’s lending UI!

If you enjoyed this post, follow me to read more defi.