Can the sector get a new lease of life?

Since the January 2024 peak, active NFT Lender users have fallen sharply: Borrowers by 90% and Lenders by 78%.

In the year Following a brief wave of optimism in early 2024, the NFT credit market has declined sharply. As of May 21, 2025, the loan amount has decreased by more than $50 million—up 83% since January and an astounding 97% since January 2024. At its peak, it was crowded with platforms like Fuzzy Blend and NFTF, eager for traders to access liquidity without selling their NFTs.

Today, however, interest has faded, and the hype around NFT lending has lost its appeal in the current market realities.

NFT loans in times of crisis

The decline in NFT lending is closely linked to the broader decline in the NFT market. Many high-end clusters have seen their floor assets drop more than 50% from peak levels, eroding mortgage rates and in turn lending activity. While a handful of projects have bucked the trend, they remain rare exceptions that fail to reinvent the sector.

Loan duration averaged 31 days in May, which is expected to remain a consistent trend in 2024 and 2025. This figure is notably lower than the 40-day average recorded in 2023, which, according to Dapradar, suggests that borrowers' commitment has shifted to shorter and more strategic use of liquidity.

The average NFT loan was just $4,000 in May 2025, a sharp decline from $14,000 in May 2024 and $22,000 in early 2022, representing a 71% annual decline. It suggests that borrowers are using low-value NFTs or avoiding heavy leverage. The consumer base has also fallen: active borrowers and lenders have fallen to 90% and 78% since their January 2024 peak.

Buying the sector

To revive NFT lending, new drivers are necessary. Dapradar notes that integrating real-world asset (RWA) NFTs — such as real estate or commodity-generating tokens — could provide stronger and more secure collateral.

Simple, intuitive interfaces that match loan terms to user needs can reduce complexity and attract more users.

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In addition, from traditional peer-to-peer lending to smart infrastructure, including non-correspondent options, credit profiling and AI-based risk tools, it can scale up the ecosystem and make NFT lending a more viable and scalable financial service.