NFT Lending Market Crashes 97% as Users and Loan Sizes Plummet

The NFT lending market has collapsed by 97% from its January 2024 peak, with monthly volume plunging from nearly $1 billion to just over $50 million in May 2025. Borrower participation dropped 90%, while lender activity fell 78%. Average loan sizes cratered 71% year-over-year, shrinking from $22,000 in 2022 to $4,000 this May.

GONDI now dominates the sector with 54.2% of outstanding volume, displacing Blur’s Blend protocol which once controlled 96% of the market. The shift reflects changing user preferences—GONDI’s longer-term, stable lending model for art NFTs has outperformed Blend’s airdrop-driven flipping strategy during the bear market.

For any recovery, the sector must develop real-world utility beyond protocol adjustments. Collateral preferences continue evolving, but without fundamental use cases, the lending freeze may persist.