Aave News Today: Transparent DeFi Protocols Drive Unprecedented Growth in Crypto Lending
- Galaxy Digital reports Q3 2025 crypto-collateralized lending surged to $73.59B, with DeFi lending up 54.84% to $40.99B. - DeFi now dominates 62.71% market share, driven by Tether's Plasma network ($3B in 5 weeks) and Aave's layer-2 expansion. - CeFi rebounded 37% to $24.37B but remains at 33.12% share, with Tether controlling 59.91% of tracked loans via Bitcoin/stablecoin collateral. - Market volatility intensified, with $19B in crypto futures liquidated in 24 hours, as protocols prioritize code-based co
Crypto-backed lending reached a record $73.59 billion in Q3 2025, fueled by a 54.84% quarter-over-quarter jump in decentralized finance (DeFi) lending, which climbed to $40.99 billion,
By the end of the quarter, DeFi commanded 62.71% of the sector, up from 59.83% in Q2 and 61.99% in Q4 2024, signaling a move toward more transparent, on-chain lending systems. This growth is propelled by incentive mechanisms such as "points farming" and airdrops, which motivate users to keep loans open despite market swings, as well as the use of advanced collateral types like
At the same time, Maple, a lending platform for institutions, achieved a milestone by increasing its loan portfolio by $630 million during the quarter . The adoption of high-throughput environments that enable "looped" strategies—depositing crypto, borrowing stablecoins, and reinvesting—has further fueled growth .
Centralized finance lending, though smaller in scale, rebounded with a 37% quarterly rise to $24.37 billion. Nonetheless, CeFi’s share of the market remains limited at 33.12%, down from 36.78% in the previous quarter.
However, the sector’s rapid expansion has led to increased volatility. On October 10, 2025, the crypto futures market saw its largest liquidation event yet, with $19 billion in perpetual futures positions erased in just 24 hours.
The lending surge in 2025 stands in stark contrast to the opaque, unsecured credit practices of 2021. DeFi protocols now represent over 80% of on-chain borrowing, while CDP-backed stablecoins like
With leverage at unprecedented levels, Galaxy concludes that the industry has shifted from counterparty risk to volatility risk. Automated liquidations now safeguard protocol solvency but also allow for sharp price swings. The report highlights a maturing sector where transparency and strong collateral requirements replace speculative lending, even as leverage continues to climb .
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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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