#OnChainLendingSurge DeFi lending has become one of the leading apps in 2024. While the overall DeFi value locked is still lower than in 2021, on-chain loans are just as active as during the previous bull cycle.

The on-chain leverage metric reveals a more mature market, where the leading protocols have spread to multiple chains. Additionally, the current on-chain leverage is only similar to 2021 in nominal terms.

The metric was reached at a time when Bitcoin (BTC) is at a crossroads that has once again raised questions about its cycle peak. In 2021, peak lending coincided with price euphoria, but ended up spreading contagion to multiple protocols. Since then, the growth of DeFi lending has been more conservative, taking into account the value of the collaterals.

Additionally, some protocols switched to T-Bills as collateral, removing a layer of risk tied to crypto prices.

Lending gets a boost from a larger pool of stablecoins

As a percentage of the available money supply in the crypto market, this cycle is still using a smaller percentage of the available stablecoins. This has led to expectations for even wider lending, which could in turn boost DEX swaps and other activities.