TL;DR
120 Blur loans on Pudgy Penguins were recalled, with 60 set for liquidation within 24 hours at a top bid of just 2.83 ETH.
Liquidated NFTs will be listed at floor price by lenders, creating sell pressure that could trigger a cascade of further liquidations.
Analysts recommend waiting ~20 hours to see if the market absorbs the supply before taking a position in Pudgy Penguins.
Why Buying Pudgy Penguins Right Now Is Risky
Pudgy Penguins is currently facing significant liquidation pressure on Blur’s lending protocol, Blend. Here’s what’s happening and why timing matters before entering a position.
Pudgy Penguins Blur Loan Liquidation: Current Situation
120 Blur loans have been recalled, with 60 of them scheduled for liquidation within 24 hours. The highest bid currently sits at just 2.83 ETH — meaning many borrowers cannot repay their debt. When liquidations occur, lenders take possession of the NFTs and list them at floor price, increasing sell pressure, pushing the floor price down, and potentially triggering a cascade of further liquidations.
How Blur’s Blend Lending Mechanism Works
On Blend, users can borrow ETH using their NFTs as collateral. When a lender recalls the loan, the borrower must repay or the collateral goes to auction. If the highest bid is lower than the outstanding loan balance, the NFT is liquidated — and the lender lists it on the market, often at or below floor price.
What This Means for Pudgy Penguins Buyers
If you’re watching Pudgy Penguins, it’s recommended to wait approximately 20 more hours to confirm whether the liquidated supply gets absorbed by the market before entering. A cascade liquidation scenario could push the floor price significantly lower in the short term.
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