The NFT marketplace has seen exponential growth in the past year. Blue-chip NFT holders are looking for other opportunities as sales have decreased.
NFT global sales volume peaked at $4.7 billion in January, but fell by half to $2.4 billion by the end of March, according to data from NFT data aggregation company.
The founder of Burnt Finance, who goes by the name Burnt Banksy, says that weak projects with poorly tied communities are partly to blame for the decline in NFT sales.
Bored Ape Yacht Club (BAYC), Mutant Ape Yacht Club (MAYC), and Azuki have all increased in value over the past 30 days.
Some NFT owners have strong beliefs in their NFTs and want to hold onto them while others are selling their digital items. There has been a rise in NFT lending because owners want to use them as assets to gain more liquid assets and generate additional yield elsewhere.
According to data by Dune Analytics user gideontay, the NFT loan volume increased 171% from $30.63 million in the fourth quarter of the year to $83.17 million in the first quarter of the year.
The majority of the lending market is focused on established high-value NFT collections, according to Stephen Young, CEO of NFTfi.
Marco Manoppo, research director at Digital Asset Research, said that people are lending their NFTs to get liquidity and to maximize their own capital efficiency.
He said that this can be done either via notablecryptocurrencies such as Genesis or through applications that are trying to facilitate NFT lending through smart contracts.
NFT owners can get a loan by putting up their digital collectibles as security, instead of having to provide other assets like a house or car. The company's platform has about $17 million in loan volumes and more than $25 million in blue-chip NFTs locked in escrow, according to the CEO and co-founder of Arcade.
There is more awareness and education about what people can do with their NFTs if there is a slowdown in primary sales.
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