A series of Bored Ape Yacht Club (BAYC) loan liquidations on NFT liquidity pool BendDAO could wipe out the entire NFT market, warned pseudonymous crypto analyst “doubleQ."

What Happened: BAYC holders that deposited their NFTs on BendDAO in exchange for short term Ethereum (CRYPTO: ETH) are at risk of being liquidated and losing their assets, as per data from BendDAO.

See Also: WHAT IS BORED APE YACHT CLUB?

BendDAO is a peer-to-peer decentralized lending platform for NFTs. Users could deposit their Bored Ape NFTs on the platform as collateral and get a loan worth up to 40% of the NFT’s value.

As the price floor for the BAYC collection has dropped to 72 ETH, as per data from CryptoSlam, the health factor of those who deposited their Bored Apes have fallen to health levels under 1.2, suggesting a mass liquidation event is likely to unfold.

“Opensea volume is at the lowest point ever in the last 12 months. There's simply not enough volume to save these liquidations,” doubleQ said on Twitter. “It's inevitable.”

Although BendDAO accounts for just two to three percent of BAYC supply, the implications of the liquidations could still add a significant amount of pressure to the underlying collection’s floor price.

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Price Action: At press time, ApeCoin (CRYPTO: APE), the native token of the BAYC ecosystem, was trading at $5.61, down 8.6% over 24 hours.