Blur's Blend Wind-Down Sparks NFT Liquidations, Ledger Spy Chip Attack Raises Security Fears

Blur is scheduled to sunset on November 12, with Blend no longer accepting new loans, but its contract will remain active until users revoke approvals. At the time discussed, about $5.5 million in collateral was exposed to liquidation, with 138 loans still open and 83 in auction. Blend can trigger liquidations when NFT floor prices fall or a lender calls a loan; after a call, borrowers may have only about 30 hours to address an underwater position. Speakers said the sudden recalls were exceptionally volatile and warned that approvals left in place could create risks even after the service winds down.

The pressure was visible in loan and market data. One account cited about 135 Bored Ape loans with roughly 560 ETH borrowed and 170 Mutant Ape loans with roughly 140 ETH borrowed, with average borrowing near 80% of floor value; other reported debt totals included 521 ETH for Bored Apes, 502 ETH for Pudgy Penguins, and 100 ETH each for Mutants and Azuki. In one 12-hour period, roughly 75 Bored Ape loans and 100 Mutant Ape loans were called, compared with the usual single-digit daily count. Speakers said the most volatile positions tended to be at or above 85% of floor value. Pudgy Penguins were reported down 18% to 2.19 ETH and Bored Apes down 16.5% to 5.1 ETH, while OCH Genesis Rings and Ring Bears fell 81% and 73% on the day. Some borrowers may choose not to repay when the NFT is worth less than the debt, leaving lenders with assets to sell into thin bids.

The risk extends beyond NFTs directly tied to Blend: borrowers may sell other assets to repay, while lenders receiving defaulted NFTs may add supply to already shallow markets. Speakers expected the unwind to remain painful for three to four weeks or longer if no large buyer absorbed distressed collateral, though one thought the broader NFT market could be healthier by the end of November once forced selling and excess leverage cleared. Blur’s wind-down was described as positive in principle but a near-term headwind ahead of ApeFest, where good news might produce a bounce without immediately stopping liquidations. Speakers disagreed on whether Blur itself had damaged NFTs: one blamed its royalty policy, incentivized bidding, and Blend for emphasizing trading and yield farming over collectibility; Dobbins pointed instead to teams’ lack of innovation and poor handling of loan-driven liquidity.

Yuga was working on an orderly transition, initially prioritizing its collections and refinancing healthier Blend loans so borrowers could keep their NFTs. Gandhi was offering loans on both Yuga collections, mostly at 10–14% APR; speakers contrasted its agreed repayment dates and amounts with Blend’s floor-price-triggered liquidations. Grails OTC and Cirrus also offered to help eligible borrowers migrate loans or explore repayment options, though not every stressed loan could be saved. Assistance for collections outside Yuga’s was under consideration, not guaranteed. Speakers said NFT-backed borrowing can provide useful liquidity and is not inherently bad, but stressed loans may still need to be liquidated. Holders were urged to revoke Blur and Blend approvals across wallets containing valuable assets, including wallets without active loans, using revoke.cash or wallet settings; about 10% of Board of YPOT Club NFTs reportedly still had open Blend approvals.

A separate security discussion focused on a small cellular LTE implant reportedly used to read a Ledger device’s screen and transmit the displayed seed phrase; the Ledger hardware itself was not altered. The investigation was ongoing, and Ledger had not verified figures circulating online about the number of affected users. Druid said available announcements suggested the incident was largely confined to the Crypto Billus reseller, and advised suspected victims to contact Ledger through official support channels rather than send devices to people offering help online. Speakers considered a rogue employee possible but viewed a third-party reseller as more likely. OneKey said it had cut ties with Crypto Billus, frozen new reseller approvals, offered eligible buyers free replacements, and advised customers to move funds to wallets with new recovery phrases; it reported no related user losses. Trezor said it was reducing its reseller program to a few partners.

Speakers called the incident a serious potential blow to trust in hardware wallets, but not evidence that hardware wallets as a whole had been compromised. Gary argued that Ledger’s closed-source secure element and firmware limit independent inspection; others said tighter reseller oversight may be more practical than costly tamper detection. The discussion also weighed the risks of proprietary wallets against the difficulty of self-custody: speakers said it can be stronger than centralized custody when done correctly, but users need to understand their tools and practices. An Apple wallet might attract people seeking simplicity, one speaker said, while others warned that a closed ecosystem, telemetry, or iCloud links could undermine privacy and independent verification. No consensus was reached on how Apple might handle recovery phrases.