If NFT lending protocols surpass $1B in TVL, BAYC collateralized loans may face increased liquidation risk. Higher lending activity raises exposure to price volatility, and a market downturn could trigger mass liquidations. Liquidation thresholds and loan-to-value (LTV) ratios will be critical factors. If NFT markets lack deep liquidity, cascading sell-offs could depress floor prices further. Risk mitigation measures, such as dynamic LTV adjustments and insurance mechanisms, will determine overall market stability.