Introduction

BendDAO essentially enables NFT holders to deposit their assets as collateral to borrow Ether. When an individual deposits an NFT into the lending platform, it lets them borrow up to 40% of that collection’s floor price in ETH. On the other side, users who deposit and lend out their ETH earn interest on those deposits. At the moment, when a borrower defaults on a loan, the NFT used as collateral goes up for auction, but bidders are required to start at 95% of the NFT's value based on the collection's current floor price. [reference]()

Objective

The objective of this bounty is to build a comprehensive dashboard that shows

1. collateral by collection
2. Total debt
3. total reserves
4. utilisation factor

As this is a dashboard bounty, the amount of explanations used are restricted to bare minimum.

Methodology

1. Active loans : to identify the NFTs that are actively under a debt, we find the balance of the respective NFT vault. When an user deposits an NFT to borrow, each nft project has it’s own “vault” where the NFT is stored. By analysing these vaults, we can identify the NFTs that are being currently held as collateral. Example vault, 0x620b70123fB810F6C653DA7644b5dD0b6312e4D8 is a vault for space doodles.
2. Debt : Debt is said to be the total amount of ETH given out by the protocol while holding the collateral. This can be calculated using the borrow and repay functions. (you can add redeem and liquidation like me for better results) . The total borrow amount - repay amount is said to be the debt.
3. Reserve : Reserve is the amount of ETH in bend dao’s possession given by the liquidity providers. To calculate reserve, you can subtract the withdrawals from deposits.
4. Utilisation factor (U) : According to bend dao Utilisation factor is an indicator of the availability of capital in the pool. The interest rate model is used to manage liquidity risk through user incentivizes to support liquidity:
   • When capital is available: lower interest rates to encourage loans.
   • When capital is scarce: higher interest rates encourage repayments for the loans and additional deposits.

Active Collateral

Observation

Among the active collaterals, BAYC has the highest debt while MAYC has the most number of loans against it.

On Checking with the number of active collateral with the official numbers ( given below ) we find that our numbers match that of the official figures

Debt

Observation

Currently 9.22k ETH is in debt. That is, bend dao has given out 9.22k ETH worth of loans which have yet to be settled.

The debt took a hit on August 23 2022 because of the media reporting that bend dao is low on liquid cash.

Reserve

Observation

Currently, the reserve in bend dao is 25.5k ETH.

The reserve took a hit on August 23 2022 because of the media reporting that bend dao is low on liquid cash which ultimately lead to some liquidity providers to pull their funds out.

Utilisation factor

The current utilisation factor is 35.9 %. That is only 35 % of the funds with bend dao have been given out as loans.

Observations

We see that the utilisation factor has 2 major peaks in the past month.

1. 2022-08-23 For the Liquidity crisis
2. 2022-09-07 for the ethereum merge

Observation

From the following graphs, we see that the interest rate for deposit closely follows the utilisation factor. This is intended to incentivise users to provide liquidity in times of cash crunch such as the one occurred on August 23 2022.

Liquidations and redeems

We find that during the liquidity crunch, a lot of NFTs were liquidated. with mutant ape yacht club being the highest. However during the the eth merge , clonex were liquidated. The trend appears to be the same for redeemed NFTs too.

One could argue that the lower base price of MAYC makes it accessible for more users to liquidate others’s NFT, which is not the case for BAYC.

NFT Distribution by user

What do the top borrowers borrow against?

Almost all the top borrowers are BAYC holders and borrow huge amounts against it.

Conclusion

As this is a dashboard bounty, we keep the words to a minimum.

Major points.

1. BAYC has the highest debt while MAYC has the most number of loans against it.
2. The debt and reserve took a hit on August 23 2022 because of the media reporting that bend dao is low on liquid cash.
3. In the same time, utilisation factor increased to unprecedented levels
4. the interest rate for deposit closely follows the utilisation factor.
5. a lot of NFTs were liquidated during the cash crunch situation
6. Almost all the top borrowers are BAYC holders and borrow huge amounts against it.

The DAO was predicted to become insolvent, but the crisis was averted because of some proactive steps by the DAO - decreasing the collateral ratio to 85 %, increasing Liquidation incentives and reducing the Liquidation protection window from 48 hours to 24 hours. It appears that, those steps have helped the project to weather the storm. However, the utilisation ratio is again jumping up because of the merge, and only time will tell if the project will survive this crisis.

Shoutout to ChinmayF from whom i have taken the deposit rate code snippet from. --ref

Reference -

Important parameters

Available eth

While the current available eth is 16.35 k ETH, it was in dire situation a couple of weeks back. It had only 885 ETH in its available pool. The DAO then decded to decrease the collateral ratio to 85 %, increasing Liquidation incentives and reducing the Liquidation protection window from 48 hours to 24 hours.

Coupled with high interest rate for deposits, the move seems to have worked.