NFT lending volume collapses 97% from peak as market activity collapses

The NFT lending frenzy has cooled dramatically, with active borrowers dropping 90% and lenders 78% over the past year.

The non-fungible token lending market has collapsed, with monthly volume plunging to just $50 million in May, a staggering 97% drop from its $1 billion peak in January 2024, DappRadar data shows. In a research report on May 27, the firm pointed out a 90% decrease in active borrowers and a 78% drop in lenders over the same period.

“The sharp decline suggests that the NFT lending narrative is no longer convincing enough for users, at least not in the current market conditions.”

DappRadar’s blockchain analyst Sara Gherghelas

Average loan sizes have followed this downward trend, shrinking from $22,000 during the market’s 2022 peak to approximately $4,000 currently, a 71% year-over-year decline, suggesting both reduced demand for leverage and lenders’ increased risk aversion.

Pudgy Penguins stand out as one of the only NFT collections still seeing strong lending activity, with $203 million in loans this year, the report notes. Meanwhile, NFT marketplace Blur‘s Blend protocol, which once commanded over 90% market share, now accounts for just 30% of outstanding loans. Smaller lending platforms like NFTfi and Arcade continue operating but with significantly reduced activity.

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 dropped nearly 20% from the year prior, while total sales declined 18%, crypto.news reported earlier. As Gherghelas put it in her 2025 research, it was “one of the worst-performing years since 2020.”