NFTfi Processes Record Number Of Loans In January
Nearly 18,000 ETH Borrowed In January
By: Owen Fernau • Loading...NFT News
NFT holders are borrowing more than ever against their digital assets, taking advantage of the uptick in prices this year.
NFTfi, a DeFi protocol which allows users to list their NFTs as collateral in order to solicit loans from would-be lenders, hit a record high of 4,399 loans disbursed in January, according to a Dune Analytics query. That’s nearly double the previous peak of 2,481 loans reached last March.
While monthly volume in dollar terms didn’t eclipse the all-time high of $47.8M reached in April 2022, it did do so in ETH terms in January, according to another Dune query.
While NFT lending markets peaked in April of last year, the space is showing new signs of life despite the price of Ether being roughly half what it was at that time.
X2Y2, which started as an NFT marketplace, has also made inroads since launching a lending product last October.
The action on NFT lending platforms comes at a time when the overall NFT market is contending with the hangover from the mania of 2021-22, which saw NFTs like Bored Apes reach floor prices of over $400,000.
NFT Bear Market
At first glance, trading volumes appear to be down 95% from their all-time highs, but considering recent research showing that wash trading accounted for roughly half of overall volume, the real decline appears to be around 75%.
Adding in the fact that ETH and other crypto assets were worth roughly double what they are now, the drop in volume looks even less dramatic.
In short, valuations and interest in the space may have dropped, but not as much as it would appear at first glance. Additionally, creators are still experimenting with how NFTs could fulfill use cases beyond speculation — numerous scams arose in the initial coin offering (ICO) mania of 2017, but out of those ashes came smart contract platforms with millions of users.
NFTfi’s recent success is further evidence that the NFT space isn’t nearly as quiet as the absence of headlines about the tokens might indicate.
It’s not a sector free of competition, however, as both BendDAO and X2Y2 have been eating into NFTfi’s market share, according to a Dune query.
NFTfi is responding by shipping new features — the protocol launched a way to bundle multiple NFTs as collateral on Jan. 26, as opposed to having to negotiate loans on each individual token.
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