Gondi and the NFT Lending Slump: What the Data Shows in 2026

NFT lending lets an owner borrow a cryptocurrency, usually ETH or a stablecoin, by putting an NFT forward as collateral. The borrower receives the loan amount, pays interest over an agreed term, and gets the NFT back when the loan is repaid. If the borrower does not repay on time, the lender may be able to claim the NFT under the rules in the loan contract.

There are two broad models. In peer-to-peer designs, a lender makes an offer on a specific NFT with set terms, and a borrower accepts it. In pooled designs, lenders deposit funds into a shared pool and borrowers draw from it against approved collateral. Peer-to-peer models give each lender more control over which NFTs they accept, while pooled models usually offer faster execution but depend more on the protocol's collateral rules.

The appeal for holders is that they can access liquidity without selling a rare or long-held NFT. The appeal for lenders is interest income and the chance to take ownership of a collateral asset if a loan defaults. Both sides depend on the value of the NFT staying reasonably stable and on there being active buyers if a sale becomes necessary.

NFT lending is therefore a different risk from ordinary token lending. Fungible tokens like ETH have deep markets and public prices across many venues. NFTs are unique and often thinly traded, so their value can be hard to measure at the moment a loan needs to be settled. That mismatch is central to understanding why the sector has struggled.

Headlines about NFT lending often quote a single percentage, and readers should ask what that percentage measures. A decline in NFT sales is not the same as a decline in loan volume, and a fall in the number of active loans is not the same as a fall in total value locked. The time frame also matters, since many reported declines compare a current period with the 2022 peak, which was unusually high.

The figures in recent coverage vary. Some reports described NFT sales falling by about 92 percent from their peak. Another analytics-based report described a drop of about 97 percent in NFT lending volume. A 2023 report cited that about 95 percent of NFT holders had lost value on their holdings. These numbers come from different datasets, methods and dates, so they cannot be added together or treated as one statistic.

A figure near 94 percent may come from a specific comparison of loan activity over a particular period. Without the exact metric, start date, end date and data source, it is not possible to confirm that number as a headline. The safer reading is that NFT lending activity has fallen steeply from its peak, and that the scale of the fall depends on the measure used.

When you read a decline figure, check four things: what was counted, over which period, against what baseline, and who collected the data. If the source does not explain these, treat the number as a rough signal rather than a precise measurement.

Several forces combined to shrink the NFT lending market after its 2022 peak. The first was falling demand for NFTs themselves. When sales drop, the number of people willing to borrow against NFTs, and the number of buyers who would absorb a defaulted collateral asset, both tend to fall as well.

The second factor was price volatility. NFT floor prices can move quickly, and a collateral asset that is worth more than the loan at origination may be worth less a few weeks later. Lenders who priced loans against a recent floor price could find their collateral covering less than they expected. That encouraged more conservative terms, which in turn reduced borrower interest.

Third, the wider crypto downturn reduced appetite for leverage and for speculative holdings. Borrowers who used NFT loans to fund purchases or to hold through a dip had less reason to take on new debt once prices weakened. Lenders also became more cautious after seeing defaults and illiquid collateral.

Fourth, the market matured in some respects. Reports often describe lending volume falling as the sector moves from speculative growth toward more selective use. That description is a judgment rather than a measurement, but it helps explain why the decline has not been a simple collapse of all activity. Some protocols kept operating with lower but steadier volume, while others reduced their scope or stopped.

Gondi is one of the NFT lending protocols that remained visible as the market contracted, and it is commonly described as a leading name in the category. Its design is peer-to-peer, so loans are negotiated against specific NFTs rather than drawn from a single shared pool. That structure can suit lenders who want to pick collateral and set terms, but it also means liquidity depends on the number of active offers at any given time.

Being a leader in a shrinking market does not mean the market has recovered. Relative position can change as other protocols adjust, as collateral demand moves, and as lenders reassess risk. A protocol can rank highly by activity while total activity is far below the 2022 peak. Readers should treat rankings as a snapshot and check the current figures directly.

Before relying on Gondi or any similar protocol, look at its official documentation for how loans are created, how repayment works, what happens on default, and which fees apply. Confirm the contract addresses from the project's own channels rather than from public reporting or unsolicited messages. Also check whether the protocol has published audits, and read what those audits did and did not cover.

Gondi's category label should not be read as an endorsement. Lending in this sector involves smart contract risk, collateral risk and counterparty risk, and those risks persist regardless of how much activity a protocol has.

NFTfi is one of the earlier and better known NFT lending platforms, and its situation illustrates how the sector has changed. Reporting in June 2026 said NFTfi would cease operations and take down its frontend website on August 31, 2026, while its smart contracts would continue to operate. Later coverage said new loan originations had already been halted, with operations set to wind down.

The distinction between a frontend and smart contracts matters. A frontend is the website and interface that users click through. Smart contracts are the code on the blockchain that holds loan terms and collateral rules. When a team stops maintaining a frontend, the underlying contracts may still execute existing loans, but users lose the convenience of a familiar interface and may need technical steps to interact with the contracts directly.

An earlier report cited total NFTfi loans of about 737 million dollars. That headline figure reflects a cumulative total over the platform's history rather than current activity, and it should not be read as the size of the market today.

The NFTfi wind-down signals that even established lending platforms can reduce or end service when volume and economics no longer support full operations. Anyone who has used or is considering a platform should read the official shutdown notice, the timeline for repayments and collateral return, and any instructions for interacting with the contracts after the frontend closes.

NFT lending carries risks that are different from holding NFTs outright, and lenders should understand them before committing funds. The first is collateral value risk. If the floor price of a collection falls, the collateral may no longer cover the loan. The lender then depends on being able to sell the NFT for a fair price, which may not be possible in a thin market.

The second is liquidity risk. A lender who receives an NFT after a default may hold an asset that is hard to sell quickly or only sells at a steep discount. Lenders should not assume that a claimed NFT can be converted to cash at the price used when the loan was made.

Third is smart contract risk. Lending protocols run on code that can contain bugs or be exploited, and an audit reduces but does not remove this risk. Check whether the protocol has been audited, read the scope of each audit, and understand whether the team can change contract rules or pause the system.

Fourth is protocol continuity risk, which the NFTfi case shows clearly. A platform can stop taking new loans, close its frontend, or wind down entirely. Lenders should know what happens to open loans in that scenario and whether repayments and collateral claims still work without the team's interface.

Finally, there is counterparty and fraud risk. Fake collection listings, copied interfaces and impersonation accounts are common in the NFT space, so verify every address and link through official project channels before sending funds.

Borrowers face their own set of risks. The most direct is default risk. If an NFT's value falls below the level needed to support the loan, or if the borrower cannot repay at maturity, the collateral can be claimed by the lender. Losing a valued NFT can be a serious outcome, especially when the borrower had planned to hold it long term.

Repayment terms are another concern. Loans have a fixed duration and interest rate in most designs, and some include penalties or extra conditions for late payment. Borrowers should calculate the total cost, including fees and any interest that accrues over the term, before accepting an offer.

Borrowers also need to understand what happens if a platform stops operating during their loan. The loan contract may continue to work, but the borrower will need a clear path to repay and reclaim the NFT. If that path depends on a frontend that has closed, the borrower should confirm the steps in advance.

Using a loan to buy another NFT or to fund speculative trades multiplies exposure. If both the collateral and the purchased asset fall in value, the borrower can face losses on both sides. Borrowers should consider whether they could repay from other funds if the collateral price moved sharply against them.

Finally, be careful when granting token approvals to lending contracts. An approval that remains open can allow a contract to move assets long after a loan has ended, so review and revoke approvals you no longer need.

Because reported figures vary, the most reliable approach is to check current data yourself. Start with the protocol's official site and documentation, which should state whether it is accepting new loans, what contracts it uses, and what the latest status updates are. Official announcements are the first place to learn about shutdowns, migrations or changes to repayment processes.

Next, look at independent on-chain dashboards. Many community-built dashboards track loan originations, active loans, repayments and defaults for specific protocols, and some track NFT sales across collections. Compare the time windows and definitions used on each dashboard, since a monthly figure, a cumulative figure and a figure from a peak month will look very different.

You can also check public blockchain explorers to see the activity of specific contract addresses, provided you have verified the address from an official source. Explorers show transaction counts and token movements, which can help confirm whether a protocol is still active.

Finally, look for reputable reporting that cites its method. When an article quotes a percentage, check whether it names the dataset, the period and the comparison. Treat any single headline number as one data point and look for consistent trends across several independent sources before drawing conclusions.

If you are considering NFT lending or borrowing, start by confirming that you are using the official website or the verified contract addresses published by the project. Phishing sites often copy lending interfaces, so avoid links from direct messages, social media replies or search ads that you have not verified through the project's own channels.

Read the loan terms in full before signing. Note the loan amount, interest rate, duration, fees, the collateral you are putting up, and exactly what triggers a default. If a term is unclear, do not proceed until the protocol's documentation or support channels explain it.

Review token approvals regularly. After a loan closes, revoke any approval that no longer needs to exist. Use only wallets you control, keep recovery phrases offline, and never share them with anyone, including people claiming to be support staff.

Size your exposure conservatively. Do not commit funds you cannot afford to lose, and avoid stacking loans on the same collateral or using borrowed funds for high-risk trades. Keep a record of your loan dates and repayment deadlines so you do not miss them.

Last, check your local rules. Lending crypto, borrowing against NFTs and disposing of collateral can have legal and tax consequences that vary by jurisdiction. Consider getting advice from a qualified professional before committing significant funds. This guide is general information, not financial or legal advice.