Can Real-World Assets Rescue the NFT Lending Market?

The once-hyped NFT lending market is facing a sharp decline, with activity plunging nearly 97% since early 2024.

Once valued at over $1 billion in monthly loan volume, the space now hovers around $50 million, according to new research from DappRadar.

With NFTs losing momentum across the board, lending platforms that allow users to borrow against their digital collectibles are seeing record-low participation. Borrower numbers are down 90%, lenders by 78%, and average loan sizes have dropped over 70%, now sitting around $4,000. Even loan durations have shortened, suggesting borrowers are seeking quick liquidity plays rather than long-term capital.

Analyst Sara Gherghelas believes the sector won’t recover without a major shift. Tokenized real-world assets—like real estate or income-generating instruments—could introduce more reliable collateral and reinvigorate lending. She also points to the need for smarter systems: think undercollateralized loans, credit scoring, and AI-based risk models.

READ MORE:

France Cracks Down on Crypto-Linked Kidnappings as High-Profile Attacks Rise

The NFT lending cooldown mirrors the broader NFT market slump, where trading volumes have nosedived 61% year-over-year. With fewer platforms active and user interest fading, the industry is clearly at a crossroads.

Still, Gherghelas isn’t writing it off. She argues that if future platforms build around utility, culture, and innovative mechanics rather than speculation, NFT lending could eventually find its footing again—this time, on sturdier ground.

Alexander Stefanov

With over 8 years of experience in the cryptocurrency and blockchain industry, Alexander is a seasoned content creator and market analyst dedicated to making digital assets more accessible and understandable. He specializes in breaking down complex crypto trends, analyzing market movements, and producing insightful content aimed at educating both newcomers and seasoned investors. Alexander has built a reputation for delivering timely and accurate analysis, while keeping a close eye on regulatory developments, emerging technologies, and macroeconomic trends that shape the future of digital finance. His work is rooted in a passion for innovation and a firm belief that widespread education is key to accelerating global crypto adoption.