At $197M, weekly NFT borrowing volume has broken an all-time record in Q2 2023, with a year-to-date increase of 270%.

This growth has been driven almost entirely by Blend thanks to its gamified rewards system, which encourages farming - indeed, 68% of its loans had a 0% APR.

This level of activity is bound to slow down considerably after the season 2 airdrop. On the one hand, the whales who borrow and lend from themselves will cease their activity. On the other, real borrowers will be affected, as without the incentive to farm for rewards, lenders will no longer offer such favorable (even free) conditions.

Blend has introduced a lot of new people to NFT lending, which should prove beneficial to the market as a whole. It might also lead some people away from the market altogether, however, since its rules allow for predatory behavior to which new users are particularly susceptible.

Overall, we’re bullish that most of these new users will use their newfound knowledge to dive deeper into the market and use it to their advantage and that the NFT Lending market will grow and evolve as a result.