Bend DAO price prediction: DeFi token turns bullish

This lending protocol is giving borrowers a chance to use NFTs as collateral

A bag filled with coins, which has 'loan' written on the side.                                 
Borrowers can lock in their NFTs to borrow ether and are given a receipt in the form a boundNFT standard – Photo: Shutterstock
                                

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Crypto loans have become a staple of DeFi ,as they grant accessible credit and offer lenders interest on their deposit. Bend DAO is hoping to be the next evolution of this process, with its NFT-based collateral system.

Most crypto loans involve locking in more collateral than users plan on taking out. Borrowers can use Bend DAO to escape this, by locking in their NFTs instead.

After a couple of bearish weeks, its governance token, BEND, has recently started rallying. Experts are conflicted on whether it can keep this up.

What is Bend DAO (BEND)?

Bend DAO is a borrowing protocol with a twist. Instead of a cryptocurrency collateral, borrowers use their NFTs to take out ether loans. Lenders of this ETH can then earn interest of their deposited funds.

There are currently only six groups of NFTS that borrowers can lock in as collateral. These include Bored Ape Yacht Club, CryptoPunks and Doodles.

When deciding on which NFTs are suitable for collateral, the Bend DAO has a selected key factors. It takes into consideration the trade volume, average value, amount of transactions, and the community.

These parameters are important as the Bend DAO whitepaper admitted: “NFT collateral used in the protocol affects the protocol at its core, in particular NFT projects accepted as collateral which safeguard the solvency of the protocol.”

How Bend DAO works

After an NFT is deposited, a “boundNFT” is then minted by the protocol. These acts as secure receipts that have the same functions as the NFTs. The metadata and ID is the same as the original NFT, which means it cannot be replaced for a different one. These boundNFT cannot be transferred between wallets, ensuring investors will never lose their NFT in the protocol.

There are a number of advantages for holders to use their NFTS to take out loans. Bend DAO has a 48-hour liquidation protection period, meaning the borrower will have two days to avoid losses caused by the market. The protocol also boasts that these boundNFTs can never be stolen.

Similarly, in return for depositing ether, lenders will get bendETH tokens. These are interest-bearing tokens with the price pegged one-to-one with the ether.

Lenders are assured that their deposit and interest will be paid. Once any borrower’s total debt exceeds the collateral value, the NFT will be liquidated at an auction price higher than the initial debt. (If no bid comes in, the Bend DAO will “participate in the NFT auctiion”, and put in a high enough bid, it appears, to ensure that every NFT auction will always cover the total accumulated debt, “for the safety of the protocol”.)

BEND token

BEND is a governance token used to make decisions for the Bend DAO protocol. Holders can stake BEND and in return get the voting-enabled veBEND token. Decisions such as which NFTs to add to the protocol can then be contributed to.

This process is a long one, however, with five steps necessary to implement a proposal.

  • The community first creates a Bend Improvement Proposal (BIP)
  • It then evaluates the BIP, collecting feedback and refining the proposal.
  • VeBend holders vote on the implementation of the BIP
  • The developers and founding team implement the proposal
  • Finally, the community evaluates the execution and votes again on whether to approve it

The whitepaper says: “This process is designed to ensure that proposals are extensively discussed before being pushed on-chain.”

Before you consider investing in BEND, one thing to note is that the developers own 21% of the token’s total supply, yet the founders have not publicly disclosed their identities. This is especially noteworthy as the CertiK audit found centralisation risks to the protocol.

BEND’s short price history

BEND went live on CoinMarketCap at $0.01 on 4 April 2022, making it a recent addition to the crypto market. The token immediately started falling, and dropped to its all-time low of $0.006 two weeks later.

The DeFi cryptocurrency has recently seen a breakout. It was listed on Uniswap on 22 April and the SWFT DApp three days later. BEND reached its all-time high of $0.012 on 25 April.

The total value locked into the protocol, the amount of deposited ether and NFTs, has also rocketed. At the beginning of April, it was sitting at roughly 4,000 ETH ($11.29m). Now, close to the end of the month, it has surged above 50,000 ETH ($141.16m)

At the time of writing, BEND has fallen slightly and is sitting at $0.07, which is still up almost 1,000% in a recent seven-day period.

Bend DAO price prediction

As the DeFi token is still new to the market, there are not many making a BEND coin price prediction. Those who do make a forecast are not too optimistic for the coin.

DigitalCoinPrice says it should see a gradual climb and eventually reach a new all-time high. Its BEND price prediction suggests it will grow from $0.09 this year to an average price of $0.14 in 2025. The token could then surge to $0.33, according to its Bend DAO price prediction for 2030.

CryptoPredictions predicts BEND could average out at a new all-time high of $0.19 by the end of this year. Its Bend DAO price prediction for 2025 says the token will race above $0.30.

Gov Capital offers the most bearish outlook for the token. Its Bend DAO price prediction for 2022 says it will drop to $0 on 2 May and will never recover.

FAQs

How many Bend DAO are there?

There is a maximum supply of 10 billion BEND.

Is Bend DAO a good investment?

It depends. Bend DAO is a platform where users can borrow cryptocurrency by supplying NFTs. However, it is very new to the crypto industry having only launched in April 2022. Investors should always carry out their own research.

Will Bend DAO go up?

That depends on whom you ask. CryptoPredictions says it could reach $0.019 by the end of this year, whereas Gov Capital suggest it will soon become worthless. Tokens are volatile, so you should never invest more than you can afford to lose.

Should I invest in Bend DAO?

BEND is a governance token giving holders a say over the future of the lending protocol. It is important to note that the founding team control 21% of that supply and therefore have a substantial say over its future. You should always conduct thorough due diligence before investing.

Further reading

The material provided on this website is for information purposes only and should not be regarded as investment research or investment advice. Any opinion that may be provided on this page is a subjective point of view of the author and does not constitute a recommendation by Currency Com Bel LLC or its partners. We do not make any endorsements or warranty on the accuracy or completeness of the information that is provided on this page. By relying on the information on this page, you acknowledge that you are acting knowingly and independently and that you accept all the risks involved.
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