The lending market of non-fungible tokens (NFTs) has witnessed its leaders solidifying their positions, with the total NFT lending volume surging to a quarterly high of $2.13 billion in Q1, representing a 43.6% quarter-over-quarter growth, according to data published by CoinGecko.

The data shows that January witnessed a record-breaking $0.90 billion in total monthly NFT lending volume, surpassing the previous peak of $0.85 billion in June 2023. Among the top gainers, Blend emerged as the leader, capturing a staggering 92.9% share of the market with a monthly lending volume of $562.33 million in March alone.

“Despite Ethereum NFT collections dominating NFT loan originations, the potential impact of the rising popularity of Bitcoin Ordinals on the NFT lending market remains an area of interest.”

CoinGecko

Other players in the NFT lending arena, such as Arcade and NFTfi, have also witnessed growth, although they represent significantly lower market share capturing 2.8% ($16.94 million in volume) and 2.2% ($13.3 million in volume) respectively. Further down the hierarchy, X2Y2, BendDAO, and Parallel Finance (formerly ParaX) hold smaller market shares of 0.8%, 0.8%, and 0.5%, respectively.

To encourage more user engagement, NFT lending platforms are rolling out new incentives to boost trading volumes. For instance, in late February, Pantera Capital-backed Arcade unveiled its “Clash of Clans” airdrop initiative, aiming to distribute ARCD tokens among 4,000 wallets, each eligible to claim 750 ARCD tokens. Similarly, other marketplaces like X2Y2 and BendDAO have also launched their own tokens for their community members.

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