What happened?
Blockchain analytics platform DappRadar pointed out that the NFT lending market's transaction volume has dropped by 97% compared to its peak. Additionally, borrower activity has decreased by 90%, and users willing to lend have decreased by 78%.
The sluggish NFT lending market is closely related to the overall decline of the NFT ecosystem. When the value of collateral collapses, lending activity shrinks accordingly.
However, tokenizing real assets such as real estate or government bonds and using NFTs as collateral for lending is expected to attract a new wave of users to lending platforms, as these NFTs can provide more stable asset values.
DappRadar: NFT lending market transaction volume has dropped by 97%
According to a recent report released by blockchain analytics platform DappRadar, the 'NFT lending' market, which surged due to the NFT craze, is now facing a crisis. Since the beginning of 2024, the NFT lending market's transaction volume and user activity have continued to decline, with the overall scale dropping from a peak of 1 billion USD to only 50 million USD, a staggering decrease of 97%.
However, DappRadar analyst Sara Gherghelas pointed out that NFTs linked to real-world assets (RWA) might be the key to saving this market.
NFT lending is using the NFTs you hold as collateral to borrow cryptocurrencies or other assets from the platform. However, as the NFT market cools, the safety and attractiveness of such lending have significantly decreased.
DappRadar's report indicates that from January 2024 to May 2025, borrower activity declined by 90%, and users willing to lend decreased by 78%. This represents that even though the infrastructure and platforms are still operational, market enthusiasm has vanished.
Additionally, the average amount of NFT lending has also shrunk, from about $22,000 per transaction in 2022 to only $4,000 now, a year-on-year decrease of 71%.
Even the 'borrowing period' reflects the market's contraction, with the average borrowing days shortening from 40 days in 2023 to 31 days, indicating that current borrowing behavior is more inclined towards short-term or tactical purposes, merely to solve temporary liquidity needs.
Could RWA create a second wave peak for the NFT lending market?
However, even though the NFT lending market is stagnant, it does not mean that the market is dead. DappRadar believes that it is currently in a phase of waiting for the next transformation opportunity, one of the most promising breakthrough points being the connection of NFTs with real assets.
Gherghelas pointed out that tokenizing physical real estate, income-generating assets, or government bonds and using NFTs as collateral for lending can not only provide a more stable and verifiable source of asset value but also reduce lending risks.
This model of 'real asset NFTs' is expected to be the key to attracting a new wave of users to lending platforms. She emphasized, 'If NFT lending is to truly step out of survival mode, it needs new application scenarios and trust mechanisms like this.'
In addition to the change in asset types, Gherghelas also mentioned that if lending platforms want to attract more users, they must innovate from a technical and infrastructure perspective. This includes developing lending mechanisms that do not require full collateral, blockchain credit scoring systems, and even AI-driven smart matching models.
The future of the NFT lending market should not be about speculation, but rather whether it can integrate practical use, cultural value, and good product design. Gherghelas emphasized that if the next wave of innovation can be built on practicality, community culture, and infrastructure design, NFT lending could still welcome a second wave, which would represent a longer-term recovery.
Data Source: DappRadar, Cointelegraph
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