The NFT<\/a> lending market has collapsed to single-digit millions in total value locked (TVL), plunging to levels last seen in 2022. Data from DefiLlama shows<\/a> the sector\u2019s TVL at roughly $8.3 million today, down roughly 97% from the sector\u2019s all-time high of more than $300 million in March 2024.<\/p>\n Arcade, a Pantera Capital\u2011backed NFT lending startup that secured<\/a> $15\u202fmillion in Series A in December 2021, now shows only about $300,000 in TVL, down more than 98% from its peak of $21.5\u202fmillion in March 2024.<\/p>\n But even protocols that once seemed more resilient are feeling the pain. Blur\u2019s lending arm, Blend, which was built in collaboration<\/a> with crypto VC giant Paradigm, now has around $3\u202fmillion in TVL, down more than 90% from over $115 million in early 2024.<\/p>\n Nicolas Lallement, co-founder of NFT Price Floor, an NFT analytics website that tracks over 1,750 collections, told The Defiant that the March 2024 peak was heavily driven by Blur\u2019s incentives.<\/p>\n \u201cBlend (Blur\u2019s lending arm) absolutely dominated the market at the time, and its growth was heavily fueled by Blur\u2019s farming meta. Once those incentives tapered off, Blend\u2019s volumes and outstanding debt fell off a cliff, and the broader sector retraced with it. That\u2019s why the chart looks like a peak followed by a crash,\u201d Lallement said.<\/p>\n The market has since transitioned to a \u201cmore stable model\u201d led by Gondi, a non-custodial peer-to-peer lending protocol for NFTs, Lallement said. He explained that the type of collateral being used has shifted, too, as Blend loans were mostly tied to profile picture NFTs and popular IP collections like Pudgy Penguins, which are highly speculative<\/a> and sensitive to events.<\/p>\n \u201cTo me, that\u2019s a healthy transition. NFT art behaves more like traditional collectible markets, and that stability creates better lending behavior,\u201d Lallement explained.<\/p>\n Commenting on the falling TVL among lending protocols, Lallement suggested that on-chain outstanding debt would be the \u201cbest lens for understanding the NFT lending market\u201d right now because NFT collateral \u201cis so illiquid.\u201d<\/p>\n![\"Outstanding](\"https:\/\/thedefiant.io\/_next\/image?url=https%3A%2F%2Fcdn.thedefiant.io%2Fpasted-1763751122721-png-76cb2a93-f57f-4df0-96de-cc3c9fde09d4.png&w=1920&q=100\"\/)