The non-fungible token lending market, as soon as seen as the one sector that would have rescued the worldwide non-fungible token market from the liquidity disaster and market stabilization, is in a essential state proper now, with reviews indicating that the sector is down over 95% from its peak season in 2024. On this article, we will discover in depth what went improper in addition to what could be carried out to rescue this dying sector.
NFT Lending Falls 97% From ATH
Information compiled by DappRadar.com, an on-chain crypto market information aggregator and non-fungible token explorer, exhibits that the non-fungible token lending quantity has plummeted by 97% since its all-time excessive in January 2024. It has fallen from almost $1 billion to simply over $50 million as of Could 2025. Throughout this era, the variety of liquidity debtors has fallen by 90% whereas the variety of lenders has fallen by 78%.
📉 Quantity momentum is gone
From almost $1B to simply $50M in Could 2025, mortgage quantity has collapsed. With out incentives and with flooring costs down, customers have misplaced confidence.
Right here’s the drop in motion: pic.twitter.com/SgRm7OJnIp
— DappRadar (@DappRadar) Could 27, 2025
By description, “NFT lending,” often known as “NFT borrowing,” is a type of lending the place people or organizations make the most of their NFT collections as collateral to safe crypto liquidity. NFT lending platforms started showing someday in 2020, with early examples like “NFTfi” launched in Could 2020. These platforms allowed customers to borrow funds (often ETH) by utilizing their NFTs as collateral.
The NFT lending sector started gaining extra traction in 2021 and 2022, with platforms comparable to Arcade taking the lead in 2022. The sectors gained momentum in 2023 shortly after the NFT market platform Blur launched its lending protocol “Mix.” In January 2024, the NFT lending market reached a $1 billion market, with platforms like Blur’s Mix and NFTfi seeing robust adoption from merchants trying to unlock crypto liquidity with out promoting their non-fungible tokens.
The NFT lending sector started plummeting this 12 months. As of Could 2025, the NFT lending market has amassed a mortgage quantity of simply above $5o million, marking an 83% drop because the starting of the 12 months and a 97% lower from the height in January 2024. The sharp decline means that the NFT lending narrative is not convincing sufficient for crypto customers within the present market situations.
GONDI Tops In NFT Lending Quantity
Gondi, a decentralized non-custodial non-fungible token lending protocol permitting for full and partial refinancing of all excellent loans, making a extra dynamic and liquid house, is the highest NFT lending platform in 2025, taking down the Blur’s Mix protocol, beforehand famend because the undisputed king of NFT lending. By mid-Could 2025, GONDI protocol controls 54.2% of the excellent NFT lending market, in comparison with Mix’s 30% share.
The GONDI NFT lending protocol started gaining floor in Q1 2025, interesting to customers searching for a extra structured lending expertise. Its current success marks a significant turning level, not simply in platform dominance, however in how lending demand is shifting towards extra sustainable, much less speculative fashions. Behind Gondi and Mix are NFTFi, Arcade, JPEG, Metastreet, Zharta, and X2Y2 NFT lending platform.
In a market the place general lending exercise has collapsed, a number of blue-chip NFT collections proceed to blow up in mortgage quantity, not due to market hype, however as a result of they’re well-managed to retain utility, liquidity, worth, or just relevance. Pudgy Penguins is an ideal instance of an NFT, main the lending market by a large margin. Because the starting of 2025, they’ve generated over $203 million in mortgage quantity, accounting for 40% of all collateralized loans.
Pudgy Penguins is distantly adopted by the Azuki NFT assortment, with $85 million, the Bored Ape Yacht Membership NFT assortment, with $46 million, and the Doodles NFT assortment. Different collections like Doodles, Milady, Lil Pudgys, and MAYC contributed mortgage gross sales quantity between 5 and 9% every. This distribution highlights a shift from speculative momentum performs to collections with perceived model power and long-term utility.
What’s Subsequent for NFT Lending?
The once-crowded NFT lending protocol panorama, dwelling to over 20 platforms, has narrowed to a smaller, extra fragmented area. The present state of NFT lending tells a well-recognized story: quantity is down, person exercise has collapsed, and speculative momentum has dried up. However with the most recent shifts in NFT platform dominance and collateral preferences, it’s clear this isn’t only a meltdown but in addition a restructuring.
Although the NFT lending and borrowing spree has ended, that doesn’t imply NFT lending is useless; it merely means the sector is shifting focus. In easier phrases, the NFT lending platforms are diversifying, use circumstances are shifting, and collateral preferences are altering. If the subsequent NFT wave shall be constructed on utility, tradition, and higher design, NFT lending would possibly simply discover its second wave. Actual World Property, together with tokenized actual property and invoices, might gas the subsequent wave of NFT lending.
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