NFT: Who will wake up the bored monkeys?

In August, the minimum price of the CryptoPunks collection exceeded that of the Bored Monkeys, the face of the NFT industry.

What does this mean in terms of the market?

Look for the reason in the BendDao concept

Tal Navarro

04/09/2022

Sunday, 04 September 2022, 01:52

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Last August an interesting phenomenon was seen in the NFT sky: the floor price of the well-known collection CryptoPunks was higher than that of the most successful collection, the Bored Monkeys Yacht Club.

This is the first time in a long time that Bored Monkeys is not the best-selling and most sought-after collection in the NFT market: The Crypto Funks Collection was launched in 2017, and was the first NFT collection to really succeed, actually contributing to shaping the NFT market as it is today.

However, since April 2021, the Bored Monkeys have overtaken the crypto punks and in fact have not looked back since, until these days.

Now we are left to wonder: is this a temporary or permanent decline, what caused this change, and most importantly, what the future holds.

Bypass crypto punks, don't look back - until August.

The bored monkeys (Photo: ShutterStock)

One possible explanation for the decline in the price of the Bored Monkeys Yacht Club is that the upcoming crypto winter is upon us: the entire NFT market is experiencing declines anyway.

Since this collection was priced at a particularly high rate compared to everything else, then the declines it experienced are also more dramatic compared to the market.

However, this explanation is a bit too simplistic: to the equation should be added the fact that CryptoPunks gained a strong momentum last August.

Part of this was due to the fact that Yuga Labs (the company that developed Bored Monkeys Yacht Club, and later bought the rights to CryptoPunks), applied the same intellectual property policy that they applied to Bored Monkeys to CryptoPunks.

Want to say, owners of a work in the collection also hold the right to make commercial use of the work, which gives added value to the owners.

Another phenomenon that has been occurring in recent months and can explain some of the trends is that due to the crypto winter the NFT market was indeed affected, but what can be called collections of blue chip NFTs have formed, i.e. collections that are considered more reliable, whose price is more stable (similar to Blue Chip shares).

Crypto Panx is completely blue chip, therefore gaining positive momentum in these months as well.

It is true that the monkeys are also a collection with a stable support price, but it seems that its support point has simply changed, probably due to an overpriced background.

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supply of monkeys

Tal Nebro (Photo: Yehats)

But probably the most influencing factor on the price is the BendDAO.

BendDAO is a peer-to-pool crypto lending platform.

How It Works?

If you hold ETH tokens and want to get a return on them, you can deposit them in the Pool, and get a nice interest on them.

On the other hand, if you want to borrow Ethereum for example for investment, and you have an NFT, you can deposit your NFT as a deposit that will serve as a guarantee for raising the debt, and receive a crypto loan on relatively good terms.

What happened with BendDAO, is that a lot of NFT holders from the luxury collection of bored monkeys, escrowed their monkey in exchange for a loan.

According to BendDAO's procedures, as soon as the value of the deposit falls below a certain price, the balance of the loan is nominated for immediate repayment by the lender: if the balance of the loan is not paid, BendDAO confiscates the deposit from the hands of the depositor and it will be sold at auction.

According to BendDAO's release, more than 70 luxury monkeys are set to be sold soon, as borrowers defaulted on their loan terms.

This is expected to flood the market with the supply of monkeys, which will lower their price (which further contributes to the drop in the price of monkeys, and thus we see a negative price spiral developing in real time).

Meanwhile, BendDAO is starting to run out of cash, and a Great Depression-style "run to the bank" is occurring, raising the level of fear about depositors' ability to get their money back.

September is expected to be a crucial month for the crypto market, one in which only the strong survive.

Prepare for the arrival of the Septembear.

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