NFT platform BendDAO experienced a bank run between August 19 and August 21 as over 15,000 Ethereum (ETH) were withdrawn from its contract within 48 hours.
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While you were asleep the BendDAO bank run finally happened
15 wETH ($25,081) left in the wallet that had 18,000 ETH ($29,160,000) in it just 48 hours ago
Still 14,500 wETH owed to lenders….
Absolute shitshow pic.twitter.com/RKkdqVAVIf
— Cirrus (@CirrusNFT) August 21, 2022
Etherscan data shows that the contract now holds only 151.52 Wrapped Ethereum, roughly $235,000.
NFT liquidation fears
BendDAO has been in the thick of the news after reports that several bluechip NFT holders had borrowed against their NFTs on the platform, spreading liquidation fears on crypto Twitter.
Co-founder of Benddao
About to get liquidated by Benddao
😂😂😂 pic.twitter.com/DvrNLI7lcc
— Erick 🦦 (@EB7) August 19, 2022
According to an August 19 Twitter thread from Double Q, the liquidation could wipe off as much as $55 million from the space.
1/ How @BendDAO and BAYC loan liquidation can nuke the entire NFT market
30,300 ETH ($55m) worth of NFTs on the line
A must read thread to protect yourself 🧵
— doubleQ (@xDoubleQ) August 19, 2022
A Twitter thread from NFTStatistics stated that users who lent ETH to others couldn’t withdraw their funds because there was not enough money in BendDAO’s contract. According to him, the platform lent out around 15,000 ETH.
Ok. Long thread on the BendDAO situation:
1) They’ve run out of ETH. There is just 12.5 WETH in the contract.
2) What does this mean? People who lent money to others via BendDAO to buy NFTs on leverage can’t pull their money out. About 15,000 ETH was lent.(1/9)
— NFTStatistics.eth (@punk9059) August 21, 2022
More NFTs could land on the auction block if borrowers cannot repay the interest on their debts, especially as the floor price continues declining.
No bids on debt-ridden NFTs
Meanwhile, most NFTs that have defaulted on their loans have not seen a bid. For context, only 4 of…
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