In the midst of the current credit crisis, the NFT Lending Protocol Bend DAO has proposed some emergency changes.

The Bend DAO development team expressed their regret, saying, "We are sorry that when we were setting the initial parameters, we underestimated how illiquid NFTs could be in a bear market."

On Monday, in an effort to restore balance to the ecosystem, the developers of the decentralized nonfungible tokens (NFTs) borrowing and lending protocol Bend DAO proposed new emergency measures.

On the same day, it became public knowledge that the venture could only repay its creditors with a total of 15 wrapped Ether (wETH) valued at $23,715, according to reports. The mechanism resulted in the lending of approximately 15,000 ETH in total.

The Bend Dao development team proposed lowering the liquidation threshold for collateral from 85% of the loan value to 70% of the loan value in order to prevent a credit crisis from affecting the protocol. This would bring the threshold closer in line with current standards.

Next, it was announced that the auction period for NFTs on its platform would be shortened from 48 hours to 4 hours.

After that, the requirement that the minimum bid price of NFTs on Bend DAO be pegged to 95% of the floor price on popular digital collectibles trading platform OpenSea would be removed. This would mean that the minimum bid price of NFTs on Bend DAO could be set at whatever value the market dictates.

The interest rates that apply to loans are going to be recalculated, going from the current 100% down to 20%.

At long last, the BendDAO treasury would be given the authority to use revenue and take care of delinquent accounts.

As a result of the falling floor prices of non-traded funds (NFTs) in the bear market, even among reputable collections, a great number of NFTs are now in danger of being liquidated as interest rates are driven to abnormally high levels.

Since the interest rates on "debt-secured" NFTs have skyrocketed to nearly 100%, some users may be finding that it is more economical to simply let go of their digital collectibles (which are also decreasing in value) rather than pay back the debt, which results in bad loans. This is because the value of the digital collectibles is decreasing.

Thirdly, non-fungible token (NFT) markets are not as liquid as coin or token markets. This means that there is a possibility that there will be no bids during the process of an NFT being liquidated, which will further contribute to the death spiral.

Before the credit issues began, Bend DAO was widely considered to be a leading platform for the borrowing and lending of NFTs.

The vote on the current proposal will take place over the course of 24 hours, and it has already reached the quorum requirement of 47 million veBend with 99.23% of the votes in favor.

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