#OnChainLendingSurge The on-chain lending market has recently experienced a significant surge, reaching record highs in active loans. As of January 7, 2025, active on-chain loans have surpassed $20 billion, breaking the previous record set in December 2021.

This growth is attributed to several factors:

Increased DeFi Activity: The decentralized finance (DeFi) sector has seen a resurgence, with total value locked (TVL) reaching $71 billion.

Innovative Lending Protocols: Protocols like Aave's V3 have significantly contributed to this growth. Aave's V3 protocol is nearing a borrowed funds milestone of $6 billion, leading the sector.

High-Risk Loans: The total value of high-risk loans, defined as those within 5% of their liquidation threshold, has surged to $55 million.

This surge in on-chain lending indicates a growing confidence in DeFi platforms and a shift towards decentralized financial services. However, it also underscores the importance of risk management, especially concerning high-risk loans nearing liquidation thresholds.