NFTs and Tokenized Real Assets: The Crypto Duo Set to Transform 2025

NFTs, those authentic digital assets, no longer shine like they did in 2021. Despite recent peaks in Bitcoin and other cryptocurrencies, enthusiasm has largely faded. Once celebrated by celebrities and collectors, their market is collapsing. The situation is alarming, as revealed by DappRadar: volumes are free-falling, NFT loans have dropped dramatically, and activity is experiencing massive decline. Yet, the emergence of real-world assets tokenized (RWA) brings new hope, offering prospects for stabilization and revival for this crypto industry in full transformation.

NFT Market in Free Fall: Diving into the Collapse of NFT Loans

The NFT market is undergoing a deep crisis, showing a 63% drop in the first quarter of 2025 , and NFT loans are no exception. According to DappRadar, the total loan volume fell from one billion dollars in January 2024 to 50 million in May 2025, a drop of 97%. Activity follows the same trend: the number of borrowers decreased by 90%, lenders by 78%. Sara Gherghelas, analyst at DappRadar, states:

2025 has not yet brought sufficient catalysts to revive NFT loans.

The average loan size dropped by 71%, falling from 22,000 dollars in 2022 to 4,000 dollars in May 2025. The average loan duration also decreased, from 40 to 31 days. These developments reflect a more frequent use of short-term loans, a sign of a more cautious approach in the crypto world.

On the side of collections used as collateral, Pudgy Penguins dominate with 40% of loans, followed by Azuki and BAYC. On the rapidly growing GONDI platform, CryptoPunks and art NFTs attract attention. This trend marks a shift towards assets considered more stable and culturally relevant.

In short, the crypto community seems to be moving away from speculative models toward a more reasoned approach. However, without major innovation, the sector risks stagnation.

Tokenized Real-World Assets: A Gamechanger for NFTs and the Crypto Industry

Real-world assets (RWA), or tokenized tangible assets, could reverse the trend. These NFTs linked to tangible assets, such as real estate or financial instruments, bring stability and trust. According to DappRadar , they represent one of the few catalysts capable of reviving the NFT loan market. Sara Gherghelas explains:

NFTs backed by real assets could unlock more stable and trustworthy collateral sources.

These innovations allow overcoming the limits of purely digital NFTs, which are often too volatile. By integrating RWAs, the crypto world can create hybrid financial products offering security and liquidity. This evolution also opens the door for broader adoption by traditional investors.

Protocols are beginning to explore these possibilities by developing smart infrastructures. For example, under-collateralized loans, credit scores, and artificial intelligence are being considered to enhance user experience. Thus, tokenization of real assets stands as a fundamental lever for the future of decentralized finance.

NFT Loans in the Crypto Universe: Functioning, Challenges, and Perspectives

NFT loans allow holders of unique tokens to obtain liquidity without selling their assets. These loans can be peer-to-peer through NFT platforms or peer-to-protocol directly with smart contracts. A notable example is using a NFT representing a luxury watch as collateral, enabling a $35,000 loan in DeFi.

Patek Philippe watch used as collateral for a DeFi loan. Source: Arcade.xyz

The appeal of NFT loans lies in the absence of traditional credit checks, opening the door to greater inclusion in the crypto realm. However, NFT volatility and regulatory uncertainty pose major risks. In case of default, the NFT is transferred to the lender, who may liquidate or keep it.

Fractionalization of NFTs further enriches this market by making expensive assets accessible to a broader community. Combined with RWAs, this technology offers a new dimension to decentralized finance.

A few key figures summarize the current situation:

• NFT loan volume down 97% since January 2024;
• Number of borrowers reduced by 90%, lenders by 78%;
• Average loan size fell from $22,000 to $4,000;
• Average loan duration reduced from 40 to 31 days;
• GONDI now holds 54% of the NFT market.

This transformation shows the crypto industry is restructuring, seeking more solidity and maturity.

NFTs backed by real-world assets (RWA) and NFT bonds open new investment horizons , according to Cointribune. These innovations could give the NFT market a second life, combining utility, security, and broader access within the crypto community.