According to data from Dune Analytics, BAYC floor price crashed to 65.7 ETH in the last 48 hours, something unseen since January 2022. Its sister collections, Bored Ape Kennel Club (BAKC) and Mutant Ape Yacht Club (MAYC) aren’t doing great either, going for 6.6 ETH and 12 ETH, respectively. Meanwhile, CryptoPunks are back on top, with its floor price at 66.3 ETH at the time of writing.
The sharp drop in BAYC prices comes amid fears of massive liquidations on BendDAO, a peer-to-pool lending protocol where NFT holders can deposit their apes as collateral for short-term ETH loans. On Monday, the protocol’s reserves fell from 18,000 wETH (Wrapped Ether) to just 15 wETH at the moment of writing. BendDAO previously loaned about 15,000 ETH.
To save protocol from insolvency, its anonymous co-founder CodeInCoffee proposed amendments to the NFT liquidation threshold and auction period. Currently, the protocol requires that the bids on liquidated NFTs are at least 95% of their floor price and above the borrower’s debt, creating little incentive for prospective buyers to participate in auctions. The proposal suggests lowering the threshold to 70%, plus auctions would last just 4 hours instead of 48.
The voting over the proposal would last 24 hours, and so far an overwhelming majority of BendDAO members are voting in favor of protocol changes. If it passes, we are likely to see liquidation auctions of over 600 BAYC, MAYC, Clone X, Azukis, and Doodles over the following months. The NFT sell-off would provide new streams of income to troubled protocol, but can also collapse the NFT market, pushing it into prolonged stagnation.