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Decentralized Finance (DeFi) surpasses milestone: currently active loans top $23.7 billion

Web3 credit platforms Aave, Compound, and Morpho spearhead an unparalleled credit expansion, promising yields that surpass conventional investments.

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Decentralized Finance sets new high: active loans surpass $23.7 billion mark
Decentralized Finance sets new high: active loans surpass $23.7 billion mark

Decentralized Finance (DeFi) surpasses milestone: currently active loans top $23.7 billion

The decentralized finance (DeFi) credit market is experiencing a significant surge, driven by market expansion, increased user and institutional participation, and technological innovation. Leading platforms like Aave, Compound, and Morpho are at the forefront of this revolution.

The DeFi market is projected to grow from $71.4 billion in 2025 to $337.04 billion by 2030, at a compound annual growth rate (CAGR) of 28.2%. Key trends and factors driving this growth include rising Total Value Locked (TVL), user growth, institutional adoption, technological innovation, and a focus on risk and security.

DeFi lending TVL surpassed $89 billion in 2025, reflecting increased liquidity and confidence in decentralized credit markets. DeFi user numbers are expected to hit over 53 million in 2025, signaling broad adoption beyond early crypto enthusiasts. Growing tokenization of real-world assets and integration of utility tokens facilitate institutional participation and expand capital inflows to DeFi lending protocols.

Platforms like Aave and Compound continue to evolve with overcollateralized lending, algorithmic governance, and advanced features such as yield-generating token integrations. Morpho, often integrated with Compound, focuses on P2P matching to optimize capital efficiency and reduce borrowing costs.

DeFi lending apps held about 59.8% of the crypto collateralized lending market by mid-2025, surpassing centralized finance (CeFi) platforms and illustrating strong sector dominance. Enhanced security protocols and risk management tools are key as systemic risks like high leverage, volatile collateral, and automated liquidations pose challenges.

The dominance of Ethereum-based collateral (over 80% of deposits) highlights asset concentration risk that platforms address through diversification and insurance mechanisms. Emerging multi-chain support and evolving regulatory frameworks aim to increase interoperability and trustworthiness, making DeFi lending more accessible to both retail and institutional investors.

Unconventional loan formats like flash loans and uncollateralized loans continue to gain popularity in the DeFi space. Despite the rapid increase in loans, the net collateral ratio has remained stable or even decreased slightly, suggesting that users are optimizing the use of their collateral without necessarily increasing the total base of deposited collateral.

The TVL in the DeFi ecosystem has reached $120 billion, recovering to 6.4% below the level registered before Trump's trade policies. The recovery in the prices of major cryptocurrencies and the improvement in credit market conditions have contributed to stimulating both the entry and retention of assets within the ecosystem.

This situation indicates greater efficiency in the use of invested capital and an intense appetite on the part of DeFi traders and strategists to maximize their returns through loans and leveraged positions. The DeFi ecosystem has demonstrated a solid post-regulatory recovery and a market that is strengthening against volatility.

In summary, the DeFi credit market’s growth is propelled by robust user and institutional demand, innovative lending models on platforms like Aave, Compound, and Morpho, and ongoing improvements in security and regulatory compliance. These factors combine to position DeFi lending as an increasingly resilient and integral part of the global financial system.

[1] DeFi Lending Market Report, 2025. [2] DeFi Lending Market Share Report, 2025. [3] Global DeFi Market Report, 2025. [4] DeFi Lending Platforms Analysis, 2025.

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