#onchainlandingsurge The on-chain lending market has recently experienced a significant surge, reaching unprecedented levels of activity. Data from Token Terminal indicates that the total active loans in this sector have surpassed $20 billion, exceeding the previous peak observed in December 2021.
Panews Lab
This resurgence is largely attributed to increased stablecoin liquidity and a more mature market structure. The availability of a broader pool of stablecoins, nearing $200 billion, has bolstered lending activities within decentralized finance (DeFi). Notably, platforms like Aave have significantly expanded their lending pools, contributing to over $22 billion in total value locked.
The Cryptocurrency Post
Institutional participation has also played a crucial role in this growth. For instance, Ledn, a firm specializing in decentralized lending and savings, reported processing over $437 million in digital asset loans to institutions in the third quarter of 2024, marking a 14% increase from the previous quarter.
Cointelegraph
However, this rapid expansion has introduced certain risks. In August 2024, the on-chain lending sector experienced a liquidation volume exceeding $320 million within a 24-hour period, setting a new high for the year.
Chaincatcher
Overall, the on-chain lending market's recent surge underscores its growing significance within the DeFi ecosystem. The combination of increased liquidity, institutional involvement, and platform expansion has propelled the market to new heights, reflecting a more mature and robust DeFi landscape