NFT Finance: Real Utility or Just Hype?

by KarNivesh | 09 September, 2025

In recent years, Non-Fungible Tokens (NFTs) have moved beyond just digital art and celebrity collectibles. By 2025, NFTs have entered a new phase known as NFT Finance (NFT-Fi). This world is about using NFTs not only as collectibles but as financial tools. The big question is – is this just hype, or does it bring real utility?

This blog breaks down the current state of NFT Finance, its opportunities, risks, and what it means for investors, especially in India.

NFT Finance Market Growth and Statistics 2025 - showing market size, lending volumes, and key metrics in Indian Rupees

What is NFT Finance?

NFT Finance is where NFTs meet Decentralized Finance (DeFi). Imagine instead of your NFT just sitting in your wallet, it could actually work for you. NFT Finance makes this possible by allowing people to:

• Borrow money by keeping NFTs as collateral

• Lend NFTs to earn interest

• Rent out digital assets

• Fractionalize ownership of expensive NFTs

• Trade NFT-backed financial products

It’s similar to how you can take a loan against your house without selling it.

The Market Reality in 2025

The NFT market has grown rapidly but remains volatile.

• Global NFT Market: ₹4,11,411 crores in 2025

• NFT Lending Market: ₹19,298 crores in 2025

• Future Projection: Tokenized assets may reach ₹1,67,80,000 crores by 2030

But the lending sector has seen major swings. From January 2024 to May 2025, NFT lending volumes collapsed by 97%. Loan sizes dropped from around ₹11.76 lakhs to just ₹3.36 lakhs.

Even with this fall, about 82 startups are active in this space, with over 50 getting venture funding. Big players include NFTfi, Arcade, JPEG’d, and MetaStreet.

Step-by-step process of how NFT lending works, from collateral listing to loan completion

Real Utility of NFT Finance

Despite challenges, NFT Finance has real applications:

1. NFT Collateralized Loans

You can use an NFT as collateral to borrow crypto. The process is simple:

1. List your NFT as collateral

2. Lenders make offers

3. NFT is locked in a smart contract

4. You receive crypto like ETH or USDC

5. Repay loan to get NFT back, or lose it to lender

Why it works:

• Access liquidity without selling your NFT

• No credit checks

• Flexible loan terms

Platforms like NFTfi have already processed loans worth ₹3,36,00,000 crores across 40,000+ deals since 2020.

2. Real-World Asset Tokenization

NFTs are now used to tokenize real-world assets (RWAs).

• Real Estate: Market size in 2025 is ₹23,520 crores. Companies like RealT have tokenized properties worth ₹84.84 crores.

• Financial Assets: Firms like BlackRock and Fidelity have launched tokenized Treasury and money market funds.

• Commodities: Gold-backed tokens like Tether Gold (XAUT) and Paxos Gold (PAXG) are rising.

• Music NFTs: Generated ₹4,368 crores in revenue in 2025.

This allows fractional ownership, making costly assets like real estate or gold accessible to more people.

3. Improved Accessibility

NFT Finance breaks barriers:

• Invest in fractions of high-value assets

• Trade anytime, unlike traditional markets

• Global reach without banks

• Transparency through blockchain

Beyond Art: Other Practical NFT Uses

NFTs are spreading into everyday applications:

• Gaming: 38% of NFT transactions come from gaming. Players own, trade, and move assets between games like Axie Infinity and Decentraland.

• Supply Chain: Brands use NFTs to track goods and prevent counterfeits. Nike’s “CryptoKicks” verifies sneaker authenticity.

• Digital Identity: Store certificates, licenses, and credentials securely as NFTs.

• Event Ticketing: About 5.3% of US ticket sales are NFT-based, reducing fraud and enabling resale tracking.

The Risks and Concerns

NFT Finance is not without challenges:

1. Volatility – NFT prices are unstable. If your NFT drops below loan value, it gets sold cheaply.

2. Fraud & Scams – Scams worth ₹840 crores occurred between 2021–22, including fake projects, counterfeit NFTs, and market manipulation.

3. Regulatory Uncertainty – Rules on whether NFTs are securities, how taxes apply, and consumer protection remain unclear.

4. Technical Barriers – Wallet management, gas fees, and contract risks make it difficult for average users.

Market Cooling – A Healthy Shift?

By September 2025, NFT sales dropped to ₹772 crores weekly, the lowest in months. Buyers fell by 58%, and average sale prices dipped by 30%.

While this looks negative, many experts see it as a healthy reset. Speculative hype is reducing, leaving space for real utility projects to grow. Major corporations like Amazon and Salesforce are even exploring NFT-based loyalty programs. Financial giants like Goldman Sachs and JPMorgan are testing NFT collateral systems.

Expert Perspectives

Case studies show promise:

• AxionVerse – Moving NFTs from speculation to structured, revenue-backed investing

• Propy – Tokenizing real estate for easier property deals

• RealT – Fractional ownership of properties through tokenization

These examples prove NFT Finance is shifting from hype to real-world use.

The Verdict: Utility With Caution

NFT Finance clearly offers real value in areas like liquidity, fractional ownership, and asset management. But risks like volatility, fraud, and regulatory gaps mean investors must tread carefully.

For Indian Investors: Best Practices

1. Do Research

   • Check if platforms are secure and audited

   • Learn about regulations in India

   • Invest only what you can afford to lose

2. Start Small

   • Begin with small amounts

   • Diversify across NFTs and platforms

   • Use trusted platforms like NFTfi or Arcade

3. Stay Informed

   • Track market and regulatory changes

   • Join NFT communities

   • Keep learning as the space evolves

NFT Finance Market Growth and Statistics 2025 - showing market size, lending volumes, and key metrics in Indian Rupees

Future Outlook

NFT Finance is moving toward maturity over hype.

• Positive Signs: Institutional adoption, better regulations, lower transaction costs

• Challenges: Simplifying user experience, global regulation, stronger security

The future of NFT Finance lies in real-world use cases, not speculation.

Conclusion

NFT Finance is not just hype, but it isn’t fully matured either. It’s an evolving technology that blends finance and digital ownership. For Indian investors, the key is caution, research, and a long-term view.

The revolution is real – NFTs are no longer just flashy digital art but stepping into roles that could redefine finance itself. However, like any revolution, it must be navigated carefully. The winners will be projects that deliver genuine utility, security, and simplicity for everyday users.