- NFT lending volume has plunged 97% since January 2024, from US$1B to just US$50M in May 2025, with both borrower and lender activity in steep decline.
- Analyst Sara Gherghelas argues tokenised real-world assets could revive the sector by offering more stable collateral and utility.
- Beyond RWAs, the report says smarter lending protocols, under-collateralised models, and AI-driven risk tools are needed to reignite interest and drive growth.
The once-explosive NFT lending market is barely recognisable in 2025, with volumes down 97% and user activity all but evaporated.
But a new DappRadar report by Sara Gherghelas suggests that pairing NFTs with real-world assets might be the sector’s best shot at survival.
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No Real Reason Why NFTs Should Bounce Back
The report basically states that, while NFTs are not exactly dead, there’s also no reason why they should bounce back. In Gherghelas words:
So far, 2025 has not delivered a compelling reason for NFT lending to bounce back. While the infrastructure is still here and the platforms remain active, activity has slowed across the board. For now, the sector seems to be in a holding pattern, waiting either for market recovery or a new use case to reignite interest.
Sara Gharghelas, Senior Blockchain Analyst and Researcher at DappRadar.And she means that across the board. Borrower activity is down over 90% since January 2024, and that of lenders by 78%. Even the average loan size has cratered from a high of US$22K (AU$34K) in 2022 to just US$4K (AU$6.22K) in May 2025, a 71% nosedive.
Gherghelas says it’s a sign of a market that’s both risk-averse and reluctant:
Either users are borrowing against lower-value assets or simply becoming more conservative with leverage.
Sara Gharghelas, Senior Blockchain Analyst and Researcher at DappRadar.But real-world asset NFTs, things like tokenised real estate or yield-generating physical goods, could be a potential catalyst to revive the market, the report reads, mostly because these assets could offer more trusted and stable forms of collateral.
Therefore, NFT lending needs a catalyst urgently, Gherghelas said, but it’s broader than just using RWAs. The report talks about the need for smarter protocols, under-collateralised loans, credit scoring systems, and AI-based risk matching tools that make it easier and safer to lend.
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