EddieJayonCrypto
15 Apr 25
In 2024, DeFi crypto lending surpassed $19 billion, nearly doubling its centralized finance (CeFi) counterpart, which held about $9.9 billion in loans mainly from Tether, Galaxy, and Ledn. The total crypto lending market stood at roughly $30 billion, or $36.5 billion including collateralized debt po...
DeFi crypto lending surged to $19.1 billion in 2024, nearly doubling the centralized finance (CeFi) lending market, which held about $9.9 billion in loans primarily from Tether, Galaxy, and Ledn. The total crypto lending market stood at roughly $30 billion, or $36.5 billion including collateralized debt position (CDP) stablecoins, marking a 43% decline from its 2021 peak due to lender collapses and falling demand.CeFi lending targets institutional clients through over-the-counter (OTC) loans, prime brokerage services, and on-chain private credit, offering customized terms and collateral but has seen reduced reach amidst counterparty risks and insolvencies. Conversely, DeFi lending expanded by 959% since 2022, reaching $19.1 billion across multiple protocols and blockchains. This growth is fueled by permissionless platforms, cross-chain capital mobility, and user preference for trust-minimized, transparent, and automated lending solutions.The rise of DeFi reflects a significant shift in capital flows and risk frameworks within crypto finance. DeFi protocols like Aave and Compound provide real-time transparency, flexible rates, and automated liquidations without intermediaries, catering to evolving liquidity conditions and user demand.Meanwhile, centralized entities such as Tether remain pivotal in institutional lending, though the momentum increasingly favors DeFi platforms for their operational stability and modular design. This realignment underscores the ongoing transformation in the crypto lending landscape, emphasizing innovation and decentralized trust.