- NFT lending protocols have seen significant decreases in Total Value Locked
- NFT derivatives are gaining traction, including indexes, lending, perpetual contracts
- After the FUD subsides, there will be more opportunities
With the recent FUD event surrounding Azuki, the floor price has dropped from a peak of 16.5 ETH to 5.5 ETH, a decline of 67%. The FUD event originated from Azuki’s new series, NFT Elementals, being accused by the community of team mismanagement and holding 20,000 ETH without any progress over the past year.
Azuki DAO, composed of community whales and members, is suing Zagabond, the founder of Azuki, and proposes to refund the 20,000 ETH.
Liquidation in NFT lending platforms is increasing
Currently, Azuki leads the decline among NFT blue-chip projects. The floor price of another top project, Bored Ape Yacht Club (BAYC), has also fallen below 30 ETH with a 23% decline in the past 7 days, but the price soared last year. Mutant Ape Yacht Club (MAYC) has experienced a 30% decline in the floor price over the past 7 days.
As a result, several NFT lending protocols have seen significant decreases in Total Value Locked (TVL) within a day, with Paraspace TVL dropping by 11% in the past 24 hours, BendDAO TVL down by 53%, and Blur lending TVL down by 26.7%.
Volume and price decline
NFT platforms are seeing rising trading volume now, but blue-chip NFT prices are down, shares Gracy Chen, managing director of cryptocurrency exchange Bitget, with Bankless Times. According to the expert, this is a clear case of market panic and trading is on the rise. It’s possible to see high turnover at the market bottom.
The future of the NFT market
The NFT market is undergoing significant changes, but a slight bearish trend will not necessarily affect the whole industry. NFT derivatives are gaining traction, including indexes, lending, and perpetual contracts. In the short term, we’ll be seeing greater price fluctuations.
More opportunities after FUD?
After an FUD subsides, there are often more opportunities. Therefore, for NFT projects like Blur that have technological innovation and overall growth in product data, there may be a brief rebound after this sharp decline in the NFT market. Users interested in short-term trading can pay attention to this opportunity, Chen concludes.
