The emergence of NFTs, or non-fungible tokens, has taken the world by storm, with some pieces selling for millions of dollars. However, a new NFT lending platform called Blend has raised concerns about liquidity in the NFT ecosystem.

Blend aims to allow NFT holders to lend their assets to other users in exchange for interest. While this concept is not new, Blend claims to offer a unique approach that provides increased liquidity and accessibility to the NFT market.

However, some industry experts have raised concerns about the potential risks associated with NFT lending platforms like Blend. One concern is the possibility of a liquidity crisis in the NFT market, as lending platforms can create a false sense of liquidity by allowing NFT holders to borrow against their assets. If too many NFT holders borrow against their assets and are unable to repay their loans, it could lead to a sell-off of NFTs, resulting in a drop in prices and a potential collapse of the market.

(by Rosie Perper)