The NFT lending sector could use a comeback, and it might find that spark in real-world assets.
NFT lending is reportedly seeing far less activity this year, according to a new study by DappRadar. Once a booming sector, it has lost 97% of its trading volume since its peak in January 2024.
The State of NFT Lending Today
NFT lending allows people to borrow money using their NFTs as collateral. Once a thriving sector of Web3, recent data indicates a significant decline in user activity. Borrower numbers have decreased by 90% since early 2024, and lender numbers have dropped by 78%.
The average loan size has shrunk, too—from $22,000 in 2022 to $4,000 this May.
DappRadar analyst Sara Gherghelas says this drop means people are either borrowing against cheaper NFTs or being more cautious with their loans. Even loan durations are shorter now, hovering around 31 days compared to 40 days last year, hinting at more short-term borrowing strategies.
Who agrees that tokenized RWAs can help revitalize the dying NFT lending market… looking for comments! ????https://t.co/UslcVcpAKb
— Rachel Wolfson (@Rachelwolf00) May 28, 2025
Gherghelas thinks RWAs may be what sets NFT lending apart. Tokenized real estate and other tangible things offer much stronger proof of value than JPEGs. These types of NFTs may help restore stability and trust in the lending market. There are also other helpful innovations, such as smarter tools to facilitate borrowing, undercollateralized loan systems, and credit scoring powered by AI. Essentially, we need better infrastructure to support the space’s growth and maturity.
A Market Waiting for a Comeback
The slowdown is partly due to a drop in the NFT market. NFT trading decreased by 61% in Q1-2025 from what it was last year, which means it also affected NFT lending. A large number of lending platforms are not active, while just a handful are still thriving.
DappRadar believes there’s more to come after the crisis. The move to NFTs in lending means a new spotlight is being applied, says Gherghelas. If the space focuses on what users need, good design, and culture, it could return to its strength—maybe even grow.
NFT Lending has cooled off hard ????
Volume is down 94% from its $1B ATH in Jan 2024. But there’s more beneath the surface. New leaders are emerging, and the sector might be evolving, not dying.
Read the full report or dive into key highlights below ????https://t.co/j39Sf1Lcuv
— DappRadar (@DappRadar) May 27, 2025
Conclusion
NFT lending may be struggling, but it’s not over yet. With the right mix of real-world assets and smarter tools, it could rise again—this time, with deeper roots and more staying power.
Disclaimer
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Yuri Schroeder