NFT Lending Hits Quarterly High, Surpasses $2.1 Billion in Q1: CoinGecko

The lending market for non-fungible tokens (nfts) has seen an unprecedented surge, reaching a quarterly high of $2.13 billion in the first quarter, representing significant quarter-on-quarter growth of 43.6%.

According nft-lending-platforms” data-wpel-link=”external” target=”_blank”>data According to CoinGecko, five of the top six platforms are seeing higher volumes.

Blend dominates with a 92.9% market share

In January, the nft lending market reached a record monthly volume of $900 million, surpassing the previous peak of $850 million in June 2023. Blend emerged as the leading nft lending platform, with a 92% market share. .9% and a monthly loan volume of $562.33 million in March 2024.

Since launching in May 2023, Blend has consistently dominated the market, with monthly share ranging between 88.8% and 96.5%. In the first quarter of 2024, Blend's loan volume increased 49.2% quarter-on-quarter to $2.02 billion.

Arcade and NFTfi followed as the next most popular platforms, with a market share of 2.8% and 2.2%, respectively, with lending volumes of $16.94 million and $13.32 million in March 2024.

Arcade posted a new quarterly high of $39.46 million in Q1 2024, up 37.1% quarter-on-quarter, while NFTfi saw a 48.3% increase in lending volume to reach the 35.88 million dollars.

The remaining platforms, including X2Y2, BendDAO, and Parallel Finance, had smaller market shares, ranging between 0.5% and 0.8%.

Incentives and influence of bitcoin ordinals

To drive greater user interaction, nft lending platforms are introducing new incentives to stimulate trading activities. In a recent move, Arcade, backed by Pantera Capital, inserted its “Clash of Clans” airdrop program at the end of February.

The initiative aims to distribute ARCD tokens to 4,000 wallets, each with the right to claim 750 ARCD tokens. Similarly, other platforms like X2Y2 and BendDAO have also initiated token launches for their community members.

Looking ahead, CoinGecko stated that the impact of the increasingly popular bitcoin Ordinals on the nft lending market is a trend worth monitoring closely. While ethereum nft collections currently dominate loan originations, the evolving landscape may see a change in dynamics.

Blend, established in May 2023, operates on a peer-to-peer lending model. It allows borrowers to use their nfts as collateral while they search for lenders offering competitive interest rates.

Although the loans have fixed interest rates, they do not have maturity dates. This flexibility allows borrowers to pay when it suits them, while lenders can exit their positions by auctioning the collateralized nfts through a Dutch auction mechanism.

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