Tether, Galaxy Digital, and Ledn Lead CeFi Crypto Lending Market Amid Surge in DeFi Borrowing Activity

Recent research highlights the growing dominance of centralized finance (CeFi) platforms like Tether, Galaxy Digital, and Ledn in the cryptocurrency lending space. These institutions have solidified their positions as key players, offering institutional-grade lending services while maintaining robust liquidity. Concurrently, decentralized finance (DeFi) borrowing volumes have experienced significant growth, reflecting increased investor confidence in permissionless lending protocols. The data underscores a bifurcated market where both CeFi and DeFi solutions are expanding, catering to different risk appetites and yield requirements among crypto investors.

The real growth is playing out onchain, the report found.

Decentralized lending protocols, which allow users to borrow crypto by locking up collateral operating around the clock and without relying on a centralized entity, have expanded rapidly. Since the market bottomed in late 2022, open DeFi borrowings have soared 959%, climbing from $1.8 billion to $19.1 billion across 20 applications and 12 blockchains, Galaxy said.

"Looking ahead, the cryptocurrency lending market appears poised for a new phase of growth, characterized by improved risk management frameworks, greater institutional participation, and clearer regulatory guidelines," Galaxy research analyst Zack Pokorny wrote.

"As the sector continues to mature, it may well serve as a bridge between traditional finance and the emerging digital asset ecosystem, facilitating broader adoption of cryptocurrency-based financial services," he added.

Read more: APX Lending Secures $20M Funding Amid ’Rising Demand’ for Crypto-Backed Loans in Canada

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