Phased-based Governance - Proposal to Establish the BendDAO Non-performing Assets Investment Fund

[guoxinchen.eth]

Author: guoxinchen.eth
Disclaimer: This proposal represents the opinions of the author(s). It is not meant to represent the position or opinions of the BendDAO core team.

Publication Date: September 18th, 2022

Background

The previous proposal Proposal for establishing a sub-treasury named "Non-performing Assets Investment Fund” received a lot of feedback and generated a precious discussion about the community’s view that the Fund can play an important role in reassuring the users. The more important thing is how to take good use of the Fund.

After many rounds of discussions, we intend to implement this proposal in phases. This proposal will be modified based on the actual implementation.

Details of the discussion

• Forum discussion

Proposal for establish a sub-treasury named "Non-performing Assets Investment Fund"

Author: Vis.eth, guoxinchen.eth, stephytao.eth; Publication date: 2022-08-25; Translator: DBOM.ETH; Proposal Background: Under the combined effects of external factors such as the current sluggish NFT market transactions, the drop of NFT value and the lack of liquidity, and the internal factors like improvable design of the BendDAO protocol, the BendDAO protocol has recently experienced negative developments, such as a large number of ETH withdrawals, soaring borrowing rates and the emergenc…

• Chinese community discussion: https://twitter.com/BigBend_/status/1566255323979333632
• English community discussion: https://twitter.com/BendDAO/status/1570605935445544963

Objective

The proposal is to establish the BendDAO Non-performing Assets Investment Fund in phases.

Phase 1 - Financing

Phase 2 - Implementation (need further discussion)

Phase 1 - Second round financing for BendDAO Treasury

Post-money valuation: $80 million

Financing currency: ETH

Financing price: 0.00801792 U (30D TWAP Price)

Financing share:

• 1 billion BEND tokens (10% of the total supply) to be sold by the DAO treasury at a purchase price equal to 6208 ETH.(ETH Price:1290 U)

• The share of a single VC/ bluechip project/ individual shall not exceed 2% (mainly from the governance point of view, limiting the right of single-party governance)

• Minimum investment amount of 100 ETH per share.

Vesting

Option A

• 100% TGE; BEND tokens will be released immediately after the investment without locking.
• The same amount of ETH as the investment amount is injected into the ETH liquidity pool. These ETH will also earn the staking rewards but will be automatically locked by the protocol control for 12 months.

Option B

• 6-month locked and then linearly released in 2.5 years

Targets

• VC, bluechip projects, community members

• Allocation: 60% for VC, 20% for bluechip projects, and 20% for the community ( considering the high-level risk of this round of financing)

Fund using plan (this clause is only used to determine the use method and use principle)

• Principle: At least 50% of the funds from this round of financing will be used for the BendDAO Non-performing Assets acquisition.

• After the successful financing, a 4/7 multi-signatory group will be established with 2 VC representatives + 1 blue-chip project representative + 3 community representatives + 1 BendDAO core team representative to manage together. (BendDAO will mainly serve as a balance between VC + blue chip project side and community representatives)

• Details of how to use it will be discussed after the funding round.

Establishment of a Financing Facilitation Team

Rights of the Financing Team

The financing Facilitation Team will be established by the BendDAO Project and the community to advance the financing process. The DAO will temporarily grant the Financing Facilitation Team full responsibility after the proposal is approved.

Each member of the Financing Facilitation Team will have 1 vote with the right to make appropriate adjustments under the principles of the proposal, subject to a majority vote (to be recorded)

Composition of the Financing Facilitation Team

For efficiency, the team is proposed to be composed of five members, with the participation of members who have a strong interest in financing within the community/project side recommended. Specific members to be discussed.

Actions after the proposal approval

1. Instantly set up a Financing Facilitation team and develop a detailed financing plan within one week, and communicate the progress with the community every month.

2. The temporary authorization of the Financing Facilitation team will last for a maximum of 3 months. If it is longer than 3 months, the team needs to apply for authorization from the community again and explain the reasons.

*All non-private content involved in the proposal should be made public to the community when requested by the community.

分阶段治理 - 关于建立 BendDAO 不良资产投资基金的提案

提案背景：
上一个提案Proposal for establish a sub-treasury named “Non-performing Assets Investment Fund收到了很多的反馈，同时也引发了非常有价值的讨论，社区认为不良资产收购基金是一颗定心丸，最重要时怎么拥有这颗定心丸，然后才是怎么用好他。因此在经过多轮讨论后，我们打算将本提案分多阶段执行，本篇文章将在多阶段执行的共识上，进行修改和迭代。

相关讨论的相关内容：
1. Proposal for establish a sub-treasury named “Non-performing Assets Investment Fund”(关于建立 BendDAO 不良资产投资基金的提案)
2. 中文社区讨论：https://twitter.com/BigBend_/status/1566255323979333632
3. 英文社区讨论：https://twitter.com/BendDAO/status/1570605935445544963

提案目标：

将“关于建立 BendDAO 不良资产投资基金的提案”分为三步走

1. 第一阶段 - 融资
2. 第二阶段 - 讨论并执行如何使用

细节 - 第一阶段：BendDAO国库的二次融资

融资估值 ：8000万美元

融资币种：ETH

融资价格： 0.00801792 U (30D TWAP Price)

融资份额：

• 融资ETH数量为6208 ETH（ETH价格:1290 U）
• 总量10% 的Bend Token（10亿枚），全部从国库中划拨
• 单个VC/项目方/个人的份额不得超过2%（主要从治理角度考虑，限制单方治理权）
• 每份最小投资额度为100ETH

代币解锁方式：可选择（A方案or B方案）

A方案：

• 投资金额到账后，将立即获得Bend代币，不锁定；
• 与投资额相同数量的ETH注入ETH流动池，这部分ETH也将享有正常的挖矿收益，但是将由协议控制自动锁定12个月，到期后可以自行提现

B方案

• 先锁定六个月，其后线性解锁，2.5年解锁完毕；

融资对象：VC、蓝筹项目方、社区

• 建议融资配比，VC占60%，蓝筹项目方和社区各占20%（主要考虑本轮融资的风险性较大）

融资使用方式（本条款只用于确定使用方法和使用原则）

• 原则：本轮融资的资金至少有50%的资金用于BendDAO不良资产收购
• 融资成功后，将成立4/7的多签小组，由2名VC代表+1名蓝筹项目方代表+3名社区代表+1名BendDAO项目方代表 共同管理。（BendDAO项目方代币主要起平衡VC+蓝筹项目方和社区代表的作用）
• 具体如何使用，将在融资后进行讨论

成立融资推动小组

融资小组的权利：为了推动融资进度，将由BendDAO项目方和社区成立融资推动小组，在提案通过后，社区将临时授予融资推动小组全权负责的权利。

融资推动成员每人1票，拥有在该提案原则下适当调整的权利，但需要通过多数人投票（需记录）

融资小组组成：为了提高效率，该小组建议由五名成员组成，在此主要建议在 社区 / 项目方内对融资方面有优势的成员参与。具体成员有待讨论。

提案通过后的行动

1、即时成立融资推动小组，并在一周内制定详细到人的融资计划，并每个月和社区沟通进度。

2、融资临时推动小组的临时授权时间最长3个月，如超过3个月，需要再次向社区申请授权，并说明原因。

*提案涉及的所有非隐私内容，在社区要求时，都应向社区公示

[AFR-LZ]

I agree with your proposal.
In terms of token unlocking, my proposal is that
First unlock 20% immediately and release the rest linearly after 1 year lock.
The goal is to allow investors to become immediately involved in community governance.

[PirateCode]

I personal against any fund to acting like Fed to “save the market”.

But I strong support that the community can join to contribute BendDAO and vote the treasury to involve more money and resource and more NFT related players to BendDAO community.

About the valuation, BendDAO will launch peer to peer lending in the future and provide the best liquidity for web3 data, I think this valuation is quite low but it’s bear market so it’s ok and it won’t effect much in the future I think.

And the total token been raised is a bit too much I think, 10% is almost half of the DAO treasury. I suggest to make it 4-7%, but the community make the decision, 10% is fine if the community think it’s ok, the treasury belongs to the community, in the long term BendDAO dev team need to transfer the owner of the treasury owner to elected multisig.

[allen]

I think it is better that if we can elect the group who can be in charge of this fundraising firstly. It is not easy but I believe BendDAO community can make it finally.

[guoxinchen.eth]

I agree, should be more cautious.

[guoxinchen.eth]

Yes, I’m thinking about how to incentivize community users to participate.

[vs01.eth]

我是vs01.eth。是benddao的社区成员，也是benddao的投资者和忠实拥护者。我想在此表述下我的观点和疑问。
我的疑问之一这次这个新的提案的发起人的背景是什么？在benddao中文社区里，我通过媒体才发现了这个新的提案。问发起人郭欣晨，作为vbend持有人是否有权参与最终投票？他的回答是：投票只决定原则和融资小组的人员，但是不会决定最后的投资协议，主要原因是协议涉及的具体参数不少，如果社区决定具体情况，将没有结果。他的回答让我对他的背景产生疑问，发起这个提案人的背景是什么？为什么他可以决定具体的参数设计而不是vbend股东所决定？他是否代表benddao项目方？
我这个疑问非常重要，如果有必要融资，这次的融资的具体参数细节才是最关键的，因为他关系到每个bend股东持币人的核心利益。vis.eth是最早发起这个提案的，但是郭新晨发起的新提案的具体参数和vis.eth差距很大，这个新的提案涉及的bend代币流通数量庞大，如果发行不当，将进一步打击bend持币人和社区的信心。
众所周知，benddao创世ifo发行时，主打社区治理和公平发售，是web3的代表项目之一。在发售中，vis.eth基本是包场ifo的。所以大多数bend代币的持有人都是在ifo完成发行后在流动池中购买的。现阶段币价从最高点已跌去90%以上了，并已跌破ifo发行价。bend的代币持有人多数都亏损严重。且当时社区成员大量在二级市场买入的重要原因之一就是ifo已经结束，benddao项目方多次ama都强调除每天释放外不会再有大量的币低价融资。所以此次融资如果具体参数细节商议不当，将造成低价筹码的流通盘大幅增加，可能会变相收割了早期的bend持币者和vbend股东，不利于社区团结。
对这个提案，我还有一些我的观察。bend第一次ifo融资就没有建池注入流动性，这次计划建立不良资产投资基金也没有注入流动性的打算。加上bend本身就是矿币，每天都有释放，流通盘每天都在增大。明年又面临着项目方代币的解禁，此时在低价融资大量的筹码对二级市场的冲击将可能是致命性的。就目前现况看，除了bendao项目方依靠ifo融资有利润外，只有大矿工存eth挖提买有利润。其他持有bend的投资人基本都是在浮亏状态。在前期投资人大量浮亏的情况下，再去低价融资，融资加剧流通盘，如果不是有核心资源的机构，我建议要考虑对二级市场和bend社区股东信心的打击，毕竟bend每日买入和在做流动性的都承担了bend的风险，维持了bend现有的价格，他们也是benddao的股东，不能漠视这些股东的核心利益。不管你把代币融资卖给谁，他们都是为了盈利出局的，这价格的不平等将可能造成社区分裂。
随着nft市场的发展，nft蓝筹份额预计会持续的加大，如果要有坏账，未来可以很有可能会超过800万美金，所以用少量有限的资金试图干预市场这种做法，我认为效果是有限的。但是低价融资bend计划占总量的10%是对市场是非常有害的。还有就是流程是否正义也会涉及到社区对dao的信任。我个人觉得没有必要融资，目前并不涉及到项目的生死，却用10%低价的股份卖掉自己损害多数投资人的利益。
我个人认为在没有达成具体对融资的细节和对象有共识前，这个融资提案会对bend有负面的影响。综上所述，我反对这个提案。

[guoxinchen.eth]

首先感谢回复，社区提案需要讨论。

@vs01.eth

我的疑问之一这次这个新的提案的发起人的背景是什么？

• 我的背景很简单，就是BendDAO的社区成员，除此之外，没有任何的利益交集点（包括不持有Bend代币）
• 发起这个提案的背景，主要是Vis.eth发起的，由于我个人希望在治理方面有更多的探索，因此我选择了主动推进这个提案。

@vs01.eth

为什么他可以决定具体的参数设计而不是vbend股东所决定？他是否代表benddao项目方？

• 我并不能决定具体的参数设计，但为了推进提案，必须首先有一个已有一定逻辑的参数让社区质疑，在质疑和讨论中，才能找到社区想要的参数设计。
• 我不代表BendDAO项目方，我只是推动提案的人，甚至我都不会参与到融资小组中，仅仅只是起推动作用。（实际上我和BendDAO项目方的目标是一致的，仅仅只是推动提案的发展）

@vs01.eth

但是郭新晨发起的新提案的具体参数和vis.eth差距很大

• 价格方面差距很大的原因是我们接触了VC后发现，最初2亿美元的价格很难促成（VC不如选择市场上逐步购买），因此选择了一个有可能被接受的价格（30 TWAP价格）

@vs01.eth

这个新的提案涉及的bend代币流通数量庞大，如果发行不当，将进一步打击bend持币人和社区的信心。

这个问题上面Andy也提到了，确实10%这个数字有待考量。

@vs01.eth

不管你把代币融资卖给谁，他们都是为了盈利出局的

@vs01.eth

在前期投资人大量浮亏的情况下，再去低价融资，融资加剧流通盘，如果不是有核心资源的机构，我建议要考虑对二级市场和bend社区股东信心的打击

• 正是为了避免这样的情况，因此我在提案中，优先考虑的是蓝筹项目方，因为蓝筹项目方在项目上和BendDAO存在共同利益。

@vs01.eth

未来可以很有可能会超过800万美金，所以用少量有限的资金试图干预市场这种做法，我认为效果是有限的。

• 我也反对这种行为，可以更直接的说，我认为这种体量的资金去干预市场无疑是以卵击石。
• 因此我在提案中并没有具体写不良资产基金该如何使用。但可以明确的是，有一笔不良资产基金和没有不良资金基金的完全是两码事。当国库拥有这笔基金，并明确他是用于不良资产处理的时候，会大大提升项目的信心。

@vs01.eth

目前并不涉及到项目的生死，却用10%低价的股份卖掉自己损害多数投资人的利益。

• BendDAO目前并没有用于风险管理的资金，作为一个借贷协议，必须存在这样一笔资金来支撑信心。
• 本次交易的核心并非资金，而是引入更多的合作方（特别是蓝筹项目方）
• 对于价格的认定，我认为市场永远是正确的，我希望可以找到一个社区和VC都能接受的价格

[AFR-LZ]

I didn’t notice this due to a change in the proposal that revised the financing valuation from $200M to $80M.
The valuation part I think there should be room for discussion.

[vs01.eth]

This is vs01.eth. I am a member of the benddao community and loyal supporter of benddao. I would like to express my views and questions here.
One of my questions is what is the background of the initiator of this new proposal? I only found out about this new proposal through the media in the benddao Chinese community. I asked the initiator, Guo Xinchen, Do we had the right to participate in the final vote as a vbend holder. His answer was that the vote would only decide the basic principles and the personnel of the financing team, but not affect the final investment agreement, mainly because the agreement involves quite a few specific parameters that would be fruitless if the community involved on the specifics. His answer made me wonder about his background, what was the background of the person who initiated this proposal? Why does he get to decide on the design of the specific parameters and not what the vbend shareholders decide? Does he represent the benddao project parties?
This is a very important question for me, if there is a need to raise funds, the specific parameters of this funding are the most crucial, as they are related to the core interests of every bend shareholder. vis.eth was the first to initiate this proposal, but the specific parameters of the new proposal initiated by Guo Xinchen are very different from those of vis.eth. This new proposal involves a huge number of bend tokens in circulation, and if it is not done properly, it will further undermine the bend project. If not properly issued, it will further undermine the confidence of bend holders and the community.
As we all know, the benddao first ifo offering, with its focus on community governance and fairness in the offering, is one of the representative projects of web3. In the offering, vis.eth was basically a packaged ifo. So most holders of bend tokens were purchased in the liquid pool after the ifo had completed. At this stage, the price of the token has fallen by over 90% from its peak, and has fallen below the ifo offering price. bend token holders have mostly made significant losses. One of the main reasons why community members were buying in large numbers on the secondary market at the time was that ifo had ended, and the benddao project has repeatedly stressed that there will be no more tokens to raise at low prices in their AMAs. So this financing, if the specific parameters details are not negotiated properly, will result in a significant increase in the circulation of low priced chips, which may disguise the harvesting of early bend holders and vbend shareholders, to the detriment of community unity.
I also have some observations about this proposal. bend did not add liquidity in its first ifo funding, and this time around it has no intention of adding liquidity in its plan to establish a distressed asset investment fund. Coupled with the fact that bend itself is a mining token and is being released every day, the selling pressure is growing every day. Next year, the project is going to unbind of their tokens, and the impact of raising a large number of chips at a low price on the secondary market will likely be fatal. On the current situation, in addition to bendao project side rely on ifo financing have profits, only big miners store eth digging to buy have profits. Other investors holding bend are basically in a floating loss state. In the case of a large number of investors floating losses in the early stage, and then go to the low price of financing, financing to exacerbate the circulation plate, if not a high quality resource institutions, I suggest to consider the secondary market and bend community shareholders confidence in the blow, after all, bend daily buy and in doing liquidity are taking the risk of bend, maintain the existing price of bend, they are also benddao shareholders, The core interests of these shareholders cannot be ignored. No matter who you sell the token financing to, they are out for profit and this price inequality will likely cause a split in the community.
As the nft market grows, the nft blue chip share is expected to continue to grow, and if there is to be bad debt, it can likely exceed $8 million in the future, so the practice of trying to intervene in the market with a small, limited amount of money is, in my opinion, of limited effect. But a low finance bend scheme of 10% of the total is very damaging to the market. There is also the question of whether the process is just or not which will also involve the community’s trust in DAO. Personally I don’t see the need to raise money, it’s not about the life or death of the project at the moment, but selling yourself with a low 10% share to the detriment of the majority of investors.
I personally think that this financing proposal will have a negative impact on bend until there is a consensus on the details and the target of the financing. In summary, I am opposed to this proposal.

[BBL00]

Compared with your two proposals, I agree more with Vs01’ proposal. For the financing part, the 10% token amount is huge, and there will be great risks. At the same time, $8 million is not equal to the largest NFTFi platform. We need to maintain enough confidence in the value of the platform. The current market does not give VCs a way to obtain a large number of Bend tokens. This financing will be their only bet on BendDAO. , and the popularity of NFTFi has never really exploded. I believe that many VCs have been paying attention to bend. We need VCs with enough strength to invest, and they need to help improve the liquidity of tokens. In this interest-driven market , the price of the token directly determines the supply and demand of the platform, and if they cannot help this, financing will lose a lot of meaning. I am also opposed to this proposal, but as a DAO member, I am grateful that Guo is moving forward

[bob]

在您对Vs01.eth回复中，我看您自己都不持有bend代币，是没办法代表Vbend用户的利益角度去思考问题，还有说到您不代表BendDao项目的人，回复中您用“我们”代表了去接触vc，对您的回复我表示前后矛盾，对您的提案出发点产生质疑。
而且低价出售Bend，在币价浮亏百分90情况下对持有Bend的用户是极大的伤害，更别说Vbend持有者，其中Vs01.eth发表的意见我是表示赞同的，800w美金低价融资对BendDao来说断送前程，对BendDao协议来说您的附加值也会让买Bend的人失去信心，对Bend用户的共识造成分裂和社区产生负面影响，拒绝提案发起。

[bob]

In your reply, I see that you do not hold bend tokens, so you are not in a position to think in terms of representing the interests of Vbend holders. And that you do not represent the people from the BendDao project. I question the starting point of your proposal.
And selling Bend at a low price, with a 90 percent loss on the coin, would be extremely damaging to Bend holders, not to mention Vbend holders. I agree with the comments made by Vs01.eth, that the $8 million with a low funding price would be a death knell for BendDao. Your added value to the BendDao agreement would damage the confidence of those who bought Bend. I do not support this proposal, because it will have a negative impact on the Bend users and the community.

[PirateCode]

Web3 is global by natural, I suggest we use english as communication language by default and no Chinese here, if anyone can’t read english use Google translate may help.

We need to follow the english is the first language global consensus, that’s how we make web3 work, it’s hard but it’s the best way to make BendDAO community bigger.

[guoxinchen.eth]

@bob

In your reply, I see that you do not hold bend tokens, so you are not in a position to think in terms of representing the interests of Vbend holders. And that you do not represent the people from the BendDao project. I question the starting point of your proposal.

• Vis.eth is the proposer of the proposal (Original proposal: Proposal for establish a sub-treasury named “Non-performing Assets Investment Fund”）
• I am the governance facilitator

So the reason that the starting point is incorrect because I don’t hold bend tokens is not valid

About the necessity of financing

Starting point: Due to BendDAO’s liquidity crisis(Details of the incident:BendDAO Liquidity: What happened and how it was fixed)

[AFR-LZ]

Why invest in BendDAO

Abstract

-Capital and Web2 talent are entering the NFT space and the NFT narrative is just beginning.

-BendDAO protocol establishes standards that belong to the NFT lending protocol

-One of the objectives of the community-sponsored financing proposal is to establish a fund for the disposal of distressed assets

-I think the valuation of BendDAO can reach $560m at this stage

-BendDAO’s future revenues are likely to be in excess of $100 million in trading fees alone

1.Why do you need depoly NFTFI sector
1.1. Current situation of NFT
The entire NFT market has recently calmed down due to the cryptocurrency bear market, but the growth has not stagnated.

Now the daily trading volume of NFT is about 16% of the peak, but the total market capitalization of NFT has not been affected by the bear market, and has only dropped about 15% from the peak time.

Now the total market capitalization of NFT market is about 9.6M ETH, based on today’s ETH price of $1250, the total market capitalization of NFT market in U.S. dollars is about $12B. ( Figure 1 )

Market Cap & Volume (Figure 1：From NFTGO)

The data in Figure 2 shows that while Traders are down 50% from their peak, Holders have been steadily increasing, with about 3.2M holders as of September 22, up 10 x from 290K holders at the beginning of 2022. ( Figure 2 )

Holders & Traders (Figure2：From NFTGO）

In terms of total market cap, the entire NFT market is still at a fairly early stage relative to the $181B total market cap at the peak of DEFI (source: defillama). In terms of number of holders, the size of the future NFT, as well as the narrative, is much more grand than DEFI.

1.2. Has the development of NFT come to a halt?

Take a look at the most recent information:

NFT Collection Doodles Raises $54M at $704M Valuation

The venture-capital firm of Reddit co-founder Alexis Ohanian led the funding round.

COOL CATS GROUP APPOINTS RECUR EXECUTIVE, DISNEY VETERAN STEPHEN TEGLAS AS CEO

It is easy to see from the recent news that Capital and Web2 talent are entering the NFT space and the NFT narrative is just beginning.

1.3. The current state of the NFTFI sector

The growth of the number of users and the entry of Capital as well as talents can prove that the development of NFT has not stagnated and is an incremental market.

The NFTFI sector, meanwhile, has benefited from the rapid growth of NFT and is gradually becoming lively.

Marketplace segment , is the main market for NFT exchange, with Looksrare, X2Y2, MagicEden, CoinbaseNFT and other platforms launched one after another, breaking the monopoly of Opensea. From the NFT-related fund-raising information, Capital has long entered the Marketpalce segment.

Lending segment, a key part of improving liquidity and trading volume in NFT Marketplace, is one of the essential components of NFTFI, which is now less popular due to the bear market. if you want to cloth NFTFI, Lending segment is now a very good choice.

2. Why BENDDAO

2.1 NFT Lending segment project list

NFT Lending protocol are divided into two main categories:

The peer-to-peer model represented by Nftfi Protocol and the peer-to-pool model represented by BENDDAO Protocol.

All adopted are the same over-collateralized lending models as AAVE or Compound.

2.2.Retaining access to NFT mortgagees

Since FT (ERC20) is fundamentally different from NFT (ERC721), the Lending Protocol is not simply a migration from ERC20.
In addition to the emphasis on ownership, NFT assets are mainly used in the right to use, so the NFT Lending Protocol needs to retain the user’s right to use the NFT to the maximum extent possible after collateralizing ownership, e.g., accepting airdrops or receiving rewards.
BendDAO takes into account the needs of NFT mortgagees and has developed the FlashClaim feature, which allows users to receive airdrops or rewards from the project after mortgaging NFT assets without having to repay the loan.

2.3.Release collateralized liquidity to inject liquidity into the NFT market

Due to the nature of NFT assets, they have been facing the dilemma of insufficient liquidity activity. This has also put the development of the NFT Lending market in a difficult position, as more and more NFT collateral is locked in the Lending market, leading to a further tightening of liquidity in the NFT market.
BendDAO developed a blue chip NFT trading market to release collateral liquidity and support the listing of collateral to address the lack of liquidity in the NFT market.
BendDAO’s blue-chip NFT marketplace is now being integrated by a growing number of NFT Marketplaces, and the liquidity released by BendDAO is making its way into the mainstream NFT market.

2.4.Lower the threshold for users to enter the NFT market

After a round of bull market in the NFT market, the price of blue-chip NFT has risen to a point where it is unaffordable for ordinary people, turning many fans away.
In order to allow more users to enter the NFT market at a lower price, BendDAO has developed a down payment purchase feature that allows users to pay only 60%-70% of the price of blue chip NFT to own blue chip NFT.

In summary, in order for the NFT lending protocol to play an active role in the development process of the NFT market, the BendDAO protocol builds on the ERC20 lending protocol and establishes standards that belong to the NFT lending protocol:

Maximize the user’s right of use ( FlashClaim );

Releasing collateral liquidity (Collateral Listing);

Lowering the threshold for users to enter NFT (Down Payment).

BendDAO’s innovations to the NFT Lending segment continue unabated, like:

Support for Rare Koda;

Adding peer-to-peer lending on the peer-to-pool.

BendDAO’s goal is to become the AAVE of NFT and go beyond it.

3. Why the community is driving this financing

3.1. Establishment of a non-performing asset disposal fund

The two liquidation crisis events of BendDAO, where the protocol had a floating loss, led to a run on depositors, and the protocol actually did not end up generating liabilities, but the negative impact was huge.

In order to address this issue, the community adjusted the liquidation parameters in the form of a proposal to reduce the probability of floating losses on the protocol.

However, in response to the “black swan” event, the community proposed to use treasury assets for raising funds and use part of the funds to establish a non-performing asset disposal fund to deal with the bad debts of the protocol.

3.2. Introduce more governance members

Since the liquidity of BEND tokens in the secondary market is not abundant enough, resulting in a high concentration of BEND tokens, in order to make the governance more decentralized, so the BendDAO community wants to introduce more governance members by way of raising funds.

3.3. Diversification of treasury assets

Diversification of treasury assets is an essential step in order to respond to future trends, and with this fund-raising, the BendDAO community hopes to establish a treasury committee to regulate the use of treasury funds.

Community participation in governance is a very positive sign.

It is recommended that the community first form a treasury council to carry out matters of financing.

4. Why I think BendDAO’s valuation should be higher

The proposed valuation of VIS.ETH is $200m, while I think the valuation of BendDAO can reach $560m at this stage.

4.1. Comparison with Major Lending Protocols

AAVE is not comparable as it sold most of its tokens during the ICO and the economic model at that time is no longer adapted to the current market.

Compound received two funding rounds in 2018 & 2019 for a total of $33m, valued at $140m in 2019 based on the number of tokens allocated to investors at the 2020 of approximately 24%.

Compound’s TVL at 2019 raise is around $100m with $214k in Protocol revenue

And in the last 5 months, BendDAO’s TVL is around $100m in USD terms, but the protocol revenue is 490 ETH, which is around $735k based on the last 30 days of TWAP.

BendDAO Protocol revenue

Let’s take a look at Compound’s August performance. Compound TVL for August was $2.9b, with an Protocol revenue of $210.4k.

BendDAO’s August performance was around $100M in TVL, but with 112 ETH in protocol revenue, which translates to around $181k in USD at the last 30 days of TWAP.

Compound TVL for August was $2.9b, with an Protocol revenue of $210.4k

AAVE also underperformed BendDAO in August, with a TVL of about $4.7b, generating only $1.4m in protocol revenue.

AAVE TVL for August was $4.7b, with an Protocol revenue of $1.4m

It can be seen that BendDAO is more profitable for the same TVL. Also at the beginning of the protocol development, BendDAO is 8 x more profitable than Compound.

In terms of TVL and protocol revenue for August, BendDAO is 25 x more profitable than Compound and 6 x more profitable than AAVE for the same TVL, but of course just 1 month’s data does not represent everything.

4.2. BendDAO’s revenue sources

Protocol revenue of BendDAO at this stage.

Interest income

As with other lending protocols, the main source of income for BendDAO at this stage is interest income. 30% of the interest paid by the borrower at the protocol interest rate is part of the protocol income and is allocated to veBEND holders.

Blue chip NFT market trading fees

The fee is 1% for down payment purchases and 2% for full payment purchases. 50% is deposited into the treasury and 50% is paid to the veBEND holder.

In summary, in the same bear market scenario, and at the same early stage of the project, Compound is valued at $140m in early 2019. at the same TVL, BendDAO is 8x more profitable than Compound over the same period, but of course there are many factors affecting profitability, so I ended up setting profitability conservatively at 4x, and then using $ 140m valuation X 4, resulting in a valuation of $560m for BendDAO at this stage.

5. Why investing in BendDAO can pay off handsomely

5.1. NFTFI Lego Components

BendDAO is now being integrated by NFT Marketplace with the following features:

Lending and down payment purchase, used by Marketplace as a financial tool;

Collateral listing, which is providing liquidity to the Marketplace.

5.2. Instant Liquidity

BendDAO has developed a new type of financial by combining lending and collateral listing: instant liquidity.

Instant liquidity will enable the complete migration of blue-chip NFT trading to BendDAO. Users selling blue-chip NFT through BendDAO will immediately receive a portion of the prepaid ETH until the NFT is sold and the final payment is settled.

Instant liquidity will be widely available when the liquidity of BendDAO’s blue chip NFT market is integrated with other Marketplaces.

5.3. How the BendDAO protocol’s revenues are growing

The two main sources of revenue for the BendDAO protocol are.

Interest income:

Peer-to-pool lending + peer-to-peer lending;

Support more blue chip NFTs.

The total market capitalization of NFT is now around $22.2b, and BendDAO has generated around $735k in revenue for the protocol in 5 months, which gives an annual revenue of around $1.7m. If the NFT market grows by 10x or 100x and the demand for lending increases, theoretically BendDAO’s revenue from the protocol will also grow in parallel.

The total market capitalization of NFT is now around $22.2b

Since BendDAO has only recently completed the whole eco-close loop, i.e.: purchase of NFT - collateralized lending - collateralized liquidity release - collateralized liquidity listing. So now the collateralized blue chip NFT in BendDAO only accounts for 3% of the total, and there is still very much room for growth.

Trading fee income:
Liquidity on collateral listings being consolidated by more markets;
Instant Liquidity Makes Blue Chip NFT Trading Migrate to BendDAO.
Over the past year, the overall NFT market volume was approximately $28.82b.

Over the past year, the overall NFT market volume was approximately $28.82b.

Blue chip NFTs trade 35% of the overall NFT trading volume.

Blue chip NFTs trade 35% of the overall NFT trading volume.

If 50% of that volume migrates to BendDAO, then the 2% fee annual revenue is about 28.82b X 50% X 35% X 2% = $100m.

These are the reasons why you should invest in BendDAO!

This is purely a personal and subjective view of BENDDAO, and as a member of the BendDAO community, it is my duty to introduce benddao to you.

Data Citation: NFTGO,Tokenterminal

[vs01.eth]

I agree with you that a reasonable valuation is good for the development of the project.

[PirateCode]

bro you can make it a medium or mirror article lol, it’s so well written.

[PirateCode]

I think we need committee for DAO treasury, no one can represent BendDAO to sell token without veBend election.

[bulugu]

Great article, data says everything!