DappRadar: NFT lending market volume has dropped 97% from a peak of ~$1B in January 2024 to ~$50M in May 2025, with borrower activity falling by 90%
Average NFT loan sizes have tanked, which DappRadar's Sara Gherghelas says means users are borrowing against low-value assets or being conservative with leverage.
Context & Ripple Effects
NFT credit is weakening after a broader contraction in the underlying market: DappRadar previously recorded an 81% decline in NFT trading volume through July 2023, while Dune data showed an earlier 97% collapse from the January 2022 trading peak. The new data indicates that the retrenchment now extends to borrowing, not just spot trading.
That is a sharp reversal from the early lending-platform expansion, when Blur's Blend had quickly captured most NFT-lending market share after launch. Smaller loans and fewer borrowers suggest leverage is no longer supporting activity at the same scale.
First-order effects
- NFT lending venues and their liquidity providers are operating with far less transaction flow as volume falls to roughly $50 million and borrower activity drops 90%.
- Borrowers are taking smaller positions, consistent with DappRadar's indication that collateral is lower-value or users are limiting leverage.
Second-order effects
- Platforms built around NFT-backed credit face pressure to retain lenders and borrowers when lower activity reduces the utility of deep lending liquidity.
- Reduced borrowing can further constrain purchasing power for NFT traders, linking the credit slowdown to already-depressed marketplace activity.
Third-order effects
- If low borrowing persists, NFT finance may shift from broad speculative leverage toward a smaller market serving only assets and users that can support conservative lending terms.
- The episode reinforces that NFT-credit products remain highly dependent on underlying asset liquidity; a durable recovery would likely require renewed trading depth as well as borrower demand.
The trend: NFT lending is following the wider NFT market from high-turnover speculation toward lower-liquidity, more selective use of on-chain credit.