NFT Lending Market Eyes Revival with Real-World Assets

In May 2025, DappRadar reported a possible revival of the NFT lending market as real-world assets became part of collateral strategies, addressing the sharp volume decline since January 2024.

DappRadar’s findings hold significance as this new collateral approach in NFT lending could reverse the recent negative trends in the market.

Severe Contraction and Key Platform

DappRadar’s report identified the severe contraction in the NFT lending market since January 2024, with a dramatic volume drop of 94-97%. “Gondi emerges as a key platform,” said DappRadar Analysts, due to its efforts in adopting real-world assets as collateral.

Opportunities with Real-World Assets

The introduction of real-world assets like tokenized real estate could rejuvenate this declining sector. According to Arcadexyz founder Gabe Frank , robust technical infrastructure is crucial to this process. Governance and transaction monitoring might play pivotal roles.

Immediate Market Impacts

Immediate effects on the market are anticipated as platforms like Gondi and Arcade.xyz navigate changes. Ethereum and governance tokens remain affected, with potential impacts on decentralized finance transactions and liquidity.

Industry Expert Insights

Industry experts see real-world assets as a catalyst for an NFT lending rebound. However, the extent of this recovery largely depends on successful RWA integration into the existing infrastructure and governance practices, as discussed by Gabe Frank.

“The current state of the NFT space requires technical infrastructure and robust monitoring tools to rebuild trust and grow NFT lending using diverse collateral types, including real-world assets.” – Gabe Frank, Founder, Arcade.xyz

Strengthening technical infrastructure and governance frameworks are vital for NFT lending’s revitalization. The industry’s recovery may parallel past patterns seen during the expansion of collateral types, despite current low on-chain activities across protocols.

Redefining NFT Lending

The sector’s ability to leverage real-world assets for growth may redefine NFT lending. This approach could address historical market collapses and overreliance on art NFTs, offering a pathway to renewed interest and user engagement in the sector.