Sunsetting NFTfi

In May 2020, NFTfi was launched with a simple idea: NFTs have value, and valuable assets deserve a credit market. We opened the category and built the first protocol that let owners borrow against their NFTs, unlocking liquidity without being forced to sell. At the time, nobody had done this before.

Since then, over $737 million in loan volume has been transacted across more than 82,000 peer-to-peer loans and 6,200 wallets, with nearly $17 million of interest distributed to lenders.

CryptoPunks and other NFTs became recognized collateral, not because a bank decided they were, but because lenders on NFTfi chose to lend against them, and borrowers trusted the protocol enough to put their most valuable assets into it. In six years of operation, NFTfi smart contracts have never lost a single NFT. In a space where hacks are a regular headline, that record matters.

None of this would have been possible without the borrowers, lenders, collectors, builders, partners, ambassadors, and community members who trusted NFTfi over the last six years. We are immensely grateful for that trust.

The NFT market has contracted to a size that no longer supports the cost of operating a protocol like NFTfi. Potential revenue no longer covers operating costs. While we remain bullish on NFTs over the long term — including as the category grows to represent new kinds of assets and utility on-chain — the timeline to that future remains uncertain. At this point, NFTfi cannot continue to subsidize the protocol against that uncertainty.

We have decided to sunset NFTfi over the coming months, with a front-end shutdown planned for the end of August. The following changes take effect today:

• New loans can no longer be originated.
• Existing loans can be refinanced until July 31st, with a maximum duration of 30 days per cycle.
• Borrowers can repay their loans at any time before Aug 31, 2026, as they always could.
• All existing loans continue to mature under their original terms.

On August 31, 2026, operations will conclude and the front-end at app.nftfi.com will go offline. Smart contracts will remain deployed on-chain and continue to function autonomously without requiring NFTfi to operate a front-end website. Existing loans can still be repaid and collateral can still be claimed directly through the contracts. Before shutdown, we will publish detailed instructions for users who need to interact directly with NFTfi smart contracts after the website is retired.

What this means for you as a user

• If you have an active loan, your loan continues to its maturity date as normal. The smart contract handles your loan exactly as it always has.
• If you have active lending positions, your outstanding loans continue under their existing terms. Borrowers will repay at maturity. If a borrower defaults, the standard liquidation process applies and you can claim the collateral NFT as you always have.

Through the sunset period, until August 31, the NFTfi Discord will remain the primary support channel. The team and community managers will continue to be active there. An FAQ post is separately available on this blog.

Closing NFTfi does not weaken our belief in the future of NFTs. In a world becoming more volatile, the importance of blockchain networks, digital ownership, and decentralization only grows.

For Stephen's personal reflection on what NFTfi has meant, read his founder letter here: https://x.com/stephen_yo/status/2061804240629121370

Thank you.