NFT Lending Market Plummets: Borrowers Down 90%, Lenders 78% in a Year!

From $1B to $50M: The Staggering Fall of NFT Loans

Holy moly, the NFT lending scene has tanked hard! We're talking a jaw-dropping 90% drop in active borrowers and a 78% nosedive for lenders in just one year. It's like the whole party just walked out the door.

Listen up, the non-fungible token lending market? It's crashed and burned, with monthly volume cratering to a measly $50 million in May. That's a mind-blowing 97% plunge from its $1 billion high in January 2024. DappRadar's latest research report from May 27 dropped this bombshell, painting a bleak picture for the once-hot sector.

"The sharp decline suggests that the NFT lending narrative is no longer convincing enough for users, at least not in the current market conditions," says DappRadar's blockchain analyst Sara Gherghelas, summing up the brutal reality.

Average loan sizes are shrinking faster than a cheap suit in the wash, going from $22,000 at the 2022 peak to just $4,000 now. That's a whopping 71% drop year-over-year, showing that folks are way less eager to borrow and lenders are spooked about taking risks.

But hey, it's not all doom and gloom. Pudgy Penguins are still strutting their stuff, with a cool $203 million in loans this year. They're like the last ones standing at the NFT lending party. Meanwhile, Blur's Blend protocol, which used to rule the roost with over 90% market share, has tanked to just 30% of outstanding loans. Smaller players like NFTfi and Arcade are hanging in there, but they're operating on a shoestring compared to the good old days.

And get this, weekly trading volumes have been falling like dominoes for weeks, scaring off capital and dragging the market back to levels not seen since its explosive 2020 debut. In 2024, trading volume tanked nearly 20% from the year before, while total sales took an 18% hit. Sara Gherghelas called it in her 2025 research: "one of the worst-performing years since 2020." Ouch.