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DappRadar believes that real-world asset NFTs can revive the NFT lending market
DappRadar noted that NFT holders are borrowing low amounts or using low-value collectibles as collateral
It revealed that the NFT lending volume has dropped by 97% since January last year

Blockchain analytics platform DappRadar has noted NFTs linked to real-world assets (RWAs) can help revitalize NFT lending, whose volume has shrunk by 97%. DappRadar observed that collectors are either borrowing lower amounts or using low-value collectibles to secure loans, something that it believes can be changed through tokenizing real-world assets like “ real estate, invoices, or yield-bearing assets.” It said that real-world asset NFTs “could unlock more stable, trusted collateral sources,” allowing collectors to borrow higher amounts without worrying about NFTs’ wild price swings. 

From $1 Billion to $50 Million in Under Two Years

According to the blockchain analytics platform, the NFT lending volume has decreased from approximately $1 billion to slightly more than $50 million in under two years. The number of borrowers and lenders has also decreased by 90% and 78%, respectively, while the average loan size has dropped to $4,000 from its 2022 high of $22,000.

The report disclosed that most borrowers are using Pudgy Penguin NFTs as collateral. Other collectibles like CryptoPunks, Squiggles, and Fidenzas are also emerging as top options for collateralizing NFT loans.

DappRadar noted that the 2024 peak volume was driven by NFT marketplace users “looking to unlock liquidity without selling their NFTs.” It observed that the NFT lending “narrative is no longer convincing enough for users.”

Intent-Based UX Also an Option

Apart from tokenizing real-world assets into NFTs, DappRadar noted that employing intent-based user interfaces can also rejuvenate NFT lending by abstracting the complexity of the borrowing process. 

The report added that NFT protocols in the lending and borrowing space need to employ innovative ways to help the space “move beyond survival mode.” Some of the ways include embracing smarter infrastructure like AI risk matching, credit scores, and undercollateralized loans.

The report comes at a time when companies offering NFT linked to real-world assets are shutting down. NFT-linked fashion house 9dcc and Nike’s RTFKT are among the latest to shutter operations due to slow uptake from the NFT community.

With NFT lending volume down over 95% from its peak, it may take time to return to such highs as  NFT protocols innovate and the community embraces real-world asset NFTs.

The post DappRadar: Real-World Asset NFTs To Revitalize NFT Lending appeared first on FullyCrypto.

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Filed under: Bitcoin - @ May 30, 2025 10:25 am