Dozens of Bored Ape Yacht Club non-fungible tokens (NFT) used as collateral for loans sit perilously close to being forcibly sold, and there's worry that could trigger even more liquidations.

The problem is brewing at BendDAO, a peer-to-peer lending service that lets users borrow ether (ETH) against their NFTs. Customers can typically take out a loan equal to 30% to 40% of the NFT collection’s floor price, or the minimum price to purchase one on the open market, with the NFT pledged as collateral.

Floor prices have tumbled in recent months, so much so that 45 of the 272 Bored Apes with BendDAO loans tied to them are now in the platform's “danger zone,“ when an NFT used as collateral is close to being auctioned off. In other words, $5.3 million worth of Bored Apes are at risk of being liquidated.

BendDAO is popular among NFT collectors, so the scope of any fire sale could be massive. The 272 Bored Apes tied to BendDAO represent 2.72% of the entire collection.

A mass liquidation event could also have implications for other NFT lending services, which have risen to prominence in the past year as the NFT industry has exploded in popularity. Bored Apes are also heralded as the most important NFT collection to industry, so cascading liquidations in could have broader consequences for other collections down the ladder.

”The short-term fluctuations in NFT floor price are normal,” BendDAO told CoinDesk in a statement. ”Consensus on blue chip NFTs wasn’t built in a day, and it will not be collapsed in a short period of time.”

Most Bored Ape holders at risk of being liquidated bought their ape pictures months ago when the floor price was 125 ETH. It's since fallen to just above 70 ETH amid a broader NFT rout. Collectors who used their Bored Apes as collateral can simply pay off the loan plus interest to withdraw the NFTs from the site.

Some of the issue lies in the mechanics of NFT trading, where floor prices will adjust as ETH’s price fluctuates against the U.S. dollar. Despite ETH’s climb from $1,000 to nearly $2,000 in the past month, lending services like BendDAO remain denominated in their originally lended token, causing some Bored Apes to be liquidated at higher dollar prices than where they were purchased.

As more high-priced NFTs go “on sale” in the form of liquidation auctions, collectors have begun window shopping for discounted prices. Bids on auctioned NFTs on BendDAO must be within 5% of the collection’s floor price, regardless of how appealing it might be.

One prolific NFT collector known as Franklin quickly became a focus of concern as the largest borrower on the platform. Franklin owns 60 Bored Apes and has taken out more than 10,000 ETH (around $17.5 million) in loans from BendDAO, although Franklin tweeted that he has since paid off the loans.

Like many services in the crypto world, Franklin’s case shows how influential "whales" can be to smaller participants, with the moves of certain individuals having the ability to put entire ecosystems in danger.

CORRECTION (August 22, 15:15 UTC): Corrects first paragraph to clarify NFTs were used as collateral for loans.