> For the complete documentation index, see [llms.txt](https://docs.coolwater.xyz/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.coolwater.xyz/blender-strategy/the-blend-lending-process.md). # The Blend Lending Process A Lender can make loan offer bids against an NFT collection collateral base by suggesting both a principal amount and interest rate. Borrowers can use those loans in one of two ways: to take a loan on an NFT they already hold or to “buy now, pay later” (i.e., buy a NFT on credit). Lenders receive Blur points, which are future claims to $BLUR airdrops, while bids remain open. Once a Borrower agrees to take out a loan, their NFT collateral goes into an escrow wallet maintained by Blur and the borrower receives ETH from the Lender from a wallet pre-funded by the Lender on Blur. When the Borrower pays back the loan, the NFT collateral is returned to the borrower’s wallet and the principal and accrued interest goes to the lender. Once originated, a loan can be called by the lender at any time. However, there is a 250 Blur point penalty for calling a loan within 24 hours of origination. Once called, a loan goes into auction for 24 hours at a steadily increasing APY. If no lenders claim the loan, then the borrower has 6 hours to repay. If the loan is not repaid, the lender can foreclose on the loan and claim the underlying NFT. --- # Agent Instructions This documentation is published with GitBook. GitBook is the documentation platform designed so that both humans and AI agents can read, navigate, and reason over technical content effectively. Learn more at gitbook.com. ## Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter, and the optional `goal` query parameter: ``` GET https://docs.coolwater.xyz/blender-strategy/the-blend-lending-process.md?ask=&goal= ``` `ask` is the immediate question: it should be specific, self-contained, and written in natural language. `goal` is optional and describes the broader end goal you are ultimately trying to accomplish on behalf of the user. GitBook uses it to tailor the answer towards what is most useful for that goal. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.