NFT Lending Volume Crashes by 97% from Peak as Market Activity Plummets
The plummeting activity in the non-fungible token (NFT) lending sector has seen a dramatic 90% drop in active borrowers and a 78% decline in lenders over the past year, as per DappRadar data. This year, the monthly volume in the NFT lending market has sunk to a mere $50 million in May, a staggering 97% drop from its peak of $1 billion in January 2024.
According to DappRadar's research report published on May 27th, this significant downturn suggests that the appeal of NFT lending is waning, particularly under the current market conditions. Average loan sizes have also diminished, shriveling from $22,000 during the market's 2022 peak to around $4,000 currently, reflecting both a reduced demand for leverage and lenders' increased risk aversion.
One of the only NFT collections to still exhibit strong lending activity is Pudgy Penguins, with $203 million in loans this year, as the report highlights. Conversely, NFT marketplace Blur's Blend protocol, which once claimed over 90% market share, now accounts for just 30% of outstanding loans. Smaller lending platforms such as NFTfi and Arcade continue to operate but with diminished activity.
Weekly trading volumes have been sliding for weeks, deterring capital and bringing the market back to levels last seen since its explosive 2020 debut. In 2024, trading volume dropped nearly 20% from the previous year, while total sales declined by 18%, as reported earlier on our website. As per Gherghelas' 2025 research, it was one of the worst-performing years since 2020.
Beeple, the famed digital artist, recently shared insights on NFTs, future plans, and the notorious "Trump's troll army," yet the collapse of the NFT lending market continues to cast a shadow over the industry, prompting growing concerns that the sector may face a substantial impact as activity slows and marketplaces succumb.
- The decline in the NFT lending sector has led to a reduced demand for leverage, with average loan sizes shrinking from $22,000 to approximately $4,000.
- Pudgy Penguins is the only NFT collection showing strong lending activity this year, with over $203 million in loans.
- Despite still operating, smaller lending platforms like NFTfi and Arcade have seen diminished activity, mirroring the overall slowdown in the NFT lending market.
- Beeple, the digital artist, recently shared insights on NFTs and future plans, but the ongoing collapse of the NFT lending market continues to cast a shadow over the industry, raising concerns about its future.
