In the middle of the credit crisis, the DAO proposes emergency changes to the NFT lending protocol.

"We are sorry that when we set the initial parameters, we didn't realize how hard it could be to sell NFTs in a bear market," says the Bend DAO development team.

On Monday, the developers of Bend DAO, a decentralized protocol for borrowing and lending nonfungible tokens (NFTs), came up with new emergency measures to try to stabilize the ecosystem.

On the same day, it came out that the project only had 15 wrapped Ether (wETH) worth $23,715 to pay back lenders. About 15,000 ETH were loaned out using the system.

The Bend Dao development team suggested that the liquidation threshold for collateral be lowered from 85% of the loan value to 70% of the loan value to avoid a credit crisis.

Next, the platform would cut the auction time for NFTs from 48 hours to 4 hours.

Then, there would be no need for the minimum bid price of NFTs on Bend DAO to be set to 95% of the floor price on OpenSea, a popular platform for trading digital collectibles.

The interest rates on loans will be changed from 100% to 20%.

Lastly, the BendDAO treasury would be able to pay off bad debts and use money from earnings.

Even in well-known collections, the falling floor prices of NFTs in a bear market have put many NFTs at risk of being liquidated because interest rates have been pushed to very high levels.

As the interest rates on "debt-secured" NFTs have skyrocketed to almost 100%, some users may find it cheaper to just give up their digital collectibles, which are also losing value, than to pay back the debt, which can lead to bad loans.

Third, NFT markets are not as liquid as coin or token markets. This means that when an NFT is being liquidated, there may not be any bids, which adds to the death spiral.

Before credit problems arose, Bend DAO was seen as a blue-chip NFT platform for borrowing and lending.

The vote on the current proposal will take place over the next 24 hours. The required quorum of 47 million veBend votes has been reached, and 99.23% of the votes are in favor.