In 2023, loans utilizing #blockchain technology have made a strong comeback with a staggering increase in the value of active tokenized private loans. The total value of these loans now stands at $582 million, representing a remarkable 128% increase compared to the previous year.
While this figure remains below the peak reached in June 2022, when it reached $1.5 billion, it suggests that loan applicants are exploring blockchain-based alternatives, especially in response to recent interest rate hikes. This finding is based on an analysis by a real loan tracking tool known as RWA.xyz.
The average Annual Percentage Rate (APR) offered by blockchain-based loan protocols is 9.65%, which is lower than the average interest rate for personal loans, standing at 11.5%.
The amount of loans being negotiated is substantial. RWA.xyz recorded a total value of $4.5 billion in blockchain-based loans closed through 1,804 transactions, indicating an average loan size of approximately $2.5 million.
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A significant player in the blockchain loan market is Fasanara Capital, a UK-based asset management company that secured a loan of $38.3 million from Clearpool with an annual yield lower than 7%. The Brazilian bank Divibank is also actively participating in this market.
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Active loans market from blockchain-based protocols since October 2020. Source: RWA.xyz
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The #Ethereum blockchain network dominates with over 43% of the total active loan market, amounting to $255 million, which marks a 203% increase from the beginning of 2023 when the loan value was $84 million.
Among the largest blockchain loan protocols are Goldfinch and Maple, with active loans of $143 million and $103 million, respectively.
The majority of blockchain loan applicants come from the consumer loan industry ($197.7 million) and the automotive sector ($186.8 million), followed by fintech, real estate, carbon credits, and cryptocurrency trading.
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Active loans market by sector from blockchain-based protocols. Source: RWA.xyz
 Despite the recent growth, the market for active loans totaling $506 million remains relatively small compared to the traditional private loan market, which is valued at $1.6 trillion.
 It is important to keep in mind that obtaining loans through blockchain protocols carries certain risks, including payment default, security, smart contracts, and other security considerations. Loan applicants should carefully consider these factors before finalizing a loan agreement.
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