The lending market based on non-fungible tokens (NFT) as collateral surpassed $2 billion in volume during the first quarter, sustaining growth of 44% compared to Q4 2023, according to a CoinGecko report.
“Crypto markets are all about market rotation […] There’s clearly a trend where OG NFT holders are leveraging these [lending] platforms to get liquidity and take advantage of the positive sentiment of the market with meme coins and other stuff,” explains NFT Price Floor analyst Nicolás Lallement.
He mentions as an example the move made by SquiggleDAO, which used some of its Chrome Squiggles holdings as collateral to get a $1 million loan through Zharta Finance, using the money to invest in other assets. However, once investors are done with profits with the current narratives, Lallement foresees the money flowing into Bitcoin, Ethereum, and blue chip NFTs, including new collections created on Bitcoin infrastructures.
Blend shows strong dominationLending platform Blend showed significant dominance in the market, achieving nearly 93% of the market share with $562.3 million in monthly lending volume as of March 2024.Since its inception in May 2023 by the leading NFT marketplace Blur, Blend has rapidly ascended to market dominance, initially seizing an 82.7% share. Consistently leading the market, Blend’s share has fluctuated between 88.8% and 96.5%. The first quarter of 2024 marked a 49.2% quarter-on-quarter (QoQ) increase in Blend’s NFT lending volume, totaling over $2.02 billion.While Blend leads the pack, Arcade and NFTfi trail as notable smaller players in the NFT lending space. Arcade holds a 2.8% market share with a $16.9 million lending volume, and NFTfi follows closely with a 2.2% share from a $13.3 million volume in March 2024. Both platforms have maintained over 1% in monthly market share since the previous year.
