What Is Going on with BendDAO?
In this dashboard you'll get to know one of the most revolutionary new approaches in NFT space which is Liquidity providing for NFTs. BendDAO is one of the most famous protocols which presents such products and we want to deep dive into their past month performance.
What is BendDAO?
BendDAO is a decentralized Lending protocol which accepts NFTs from some Blue chip projects as collateral. It provide instant liquidity up to 40% of floor price for NFT owners that don’t want to sell their NFTs cheap or are in need of liquidity. Anyone familiar with NFT space knows how big of a deal this is since NFTs are of the least liquid assets in crypto.
What can you do with BendDAO?
- You can lend your ETH and earn APY. Your ETH will be used as liquidity for protocol.
- You put your supported NFT as collateral and borrow up to 40% loan against it.
- You can list your NFT as collateral and borrow. The buyer will pay your loan to smart contract and the reminder to you.
- You can borrow to buy an NFT. this means that you can instantly put your NFT as collateral and pay 40% of its price with your borrow amount.

- Total, Daily & Cumulative ETH deposited into BendDAO for Liquidity Providing
- Total, Daily & Cumulative ETH withdrawn from BendDAO
- Total, Daily & Cumulative ETH borrowed from BendDAO
- Daily number of NFTs as collateral separated by the project
- Top Buyers/Borrowers based on amount and count
- Total ETH borrowed against CryptoPunks
Some Notes:
- This analysis is done using FlipsideCrypto database on Sep 3rd, 2022.
- All data and analysis are starting from August 1st to Sep 3rd.
- Since Punks have different standard contracts they have a separate gateway in bendDAO. This and the fact that they are pretty much the most famous reference point in NFT space led me to a comparison theme between Punks and Non-Punks projects.
- This is the WETH gateway contract which handles the Deposit, withdrawal, borrow, repay, etc, for BendDAO users: ==0x3b968d2d299b895a5fcf3bba7a64ad0f566e6f88==
- bendDAO has a feature that enables batch borrows. this leads to less payment for gas fee and ease the process. But this has led to ambiguities for querying the borrowed amount for each Project since there are cases in which NFTs from two or more projects are being listed and borrowed against.
Data & Analysis
We’ll start our analysis with the Heart of the protocol:
lending section of BendDAO, Where you can lend your ETH and earn APY.
Insights:
- 60K ETH worth more than 96 million dollars was deposited and ~ 58K ETH was withdrawn during this time. This doesn’t mean that there are only 2K ETH liquidity in protocol. you have to notice the timeframe and constant deposit/withdraw actions.
- It is interesting that even though ETH performed excellent in price in last month, still more people were willing to deposit. we should see how merge would effect these stats!
Takeaways
- From August 1st, there are more ETH deposited, more unique depositors and more deposit actions than respective Withdraw stats.
- BendDAO ran into a liquidity problem and on the 20th and 21st of august, more than 25k ETH was withdrawn from protocol, while a lot of people were unable to withdraw their ETH due to protocol insolvency.
- After August 23rd BendDAO restored its status as it constantly gained more ETH deposited.
- Borrowed ETH was more than Repaid ETH but both are way lower than Deposit and Withdraw amounts.
- August 24th had the most NFTs put as collateral probably after ETH flowed into pools because of high APYs.
- BAYC and MAYC are the most popular collections on BendDAO

To notice if there are any noticeable trends or moments, we can not rely solely on total stats; For this purpose, we need daily and cumulative demographics
The Liquidation crisis
If you take a look at charts below, you can see that starting from August 19th and culminating on August 21st, there is a significant spike both in deposits and withdrawals. What was the reason behind this move?
If you are into NFT space you probably already know that there has been a great discussion and debate on liquidations on BendDAO. You can see This & This twitter threads on how the situation looks like IRL and This thread as an opposite take. Simply put, BendDAO which is here to solve the problem of liquidity for NFTs ran into a liquidity problem and become insolvent to pay back the ETH that people lent as liquidity to earn interest. You ask why?
The price of ETH and Floor of NFTs dropped significantly and some NFTs got liquidated because the HF came below 1 (Meaning the value of their collateral is lower than their debt). Theoretically these NFTs should be bought at auctions but since there is a condition for the bid price (0.95 OP Floor) + paying the debt, no body is willing to buy them. Short story: ETH is Gone, NFTs are in DAO Treasury and nobody buys them. If team decides to sell them for ETH to pay those who provided liquidity, then Floor price drops more and more NFTs will be liquidated.
Now That you know what was going on BendDAO in past couple of weeks, it’s time to take a look at Borrow and Repay statistics.
Insights:
- TBH I expected to see more ETH repaid since there were users at the edge of liquidation. I believe there are three reasons why this expectation wasn’t fulfilled:
- Most repays occur in a special mechanism in which the buyer pays the debt of the borrower and buys his/her NFT. there was no buyer then there was no repay.
- since the ETH pool was empty, the interest rate was too high and for some people, it didn’t worth paying the debt to stop the liquidation.
- there might be other contracts for payment in these situations that I’m not aware of.

BendDAO supports 7 NFT Collection:
- BAYC
- MAYC
- Doodles
- Space Doodles
- Azuki
- Clonex
- Crypto Punks
In this chart, you can see that BAYC and MAYC are by far the most popular projects on BendDAO. Actually, the entire liquidation debate was also around these apes.
It’s interesting how owners of different NFTs prefer one protocol over another. Opposite to BAYC collections, Crypto Punks owners are not very interested in BendDAO services.
- They mostly do single transactions (they are not whales?)
- someone take loan against 10 of his/her CPs twice.
- These two transactions were responsible for the highest borrows from BendDAO against CPs with ~300 ETH.

Now Let’s look at some Top Addresses for Punk and Non-Punk Collections; Those with the most ETH borrowed and with the most number of engagements.
- The address that borrowed two times against his/her punks actually borrowed more than 536 ETH for these actions.
- There are only 3 addresses in August that had more than 1 punks interaction/traded.
- Top Non-Punk Borrower borrowed ~4K ETH against his/her Collateral.
- Top Non-Punk Users mostly had interacted with BAYC, MAYC, and Azuki.
Conclusion
I didn’t want to keep you guys hanging in the air but the truth is these debates have no final say. while protocols like BendDAO are innovative and are revolutionizing the NFT scene, they still have a long path ahead of them.
These are tests with high prices to pay. we know how devs can vanish being unsuccessful with an idea, but thank god it never led to conservatism in crypto market. In Crypto everything is radical at its highest level.
BendDAO formed Almost on the last days of NFT hype and a factor as simple as time of launch can change everything for a protocol. As far as numbers indicate, Protocol is still being used, contracts are working fine and there is active DAO and community constantly monitoring the situation and updating accordingly.
I’m not saying there is nothing to worry about, but this is why we are here.