Crypto Lending Reaches $73.6B Record, DeFi Gains 66.9% Market Share

Crypto-collateralized lending reached an all-time high of $73.59 billion in Q3 2025, surpassing the previous peak by 6.09% with onchain lending now holding a 66.9% market share.

The market expanded by $20.46 billion in Q3, marking a 38.5% growth from the previous quarter.
DeFi lending applications grew to $40.99 billion, expanding $14.52 billion quarter-over-quarter.
Bitcoin served as a primary collateral asset, driving DeFi apps to hold a 55.7% share of the total lending market.

On-chain borrowing through lending applications accounts for over 80% of activity, with CDP stablecoins representing 16%.

Factors driving DeFi expansion include points farming, airdrop programs, improved collateral assets, and cryptocurrency price appreciation.
The Aave DeFi app gained significant market share on the Plasma blockchain, capturing more than $3 billion in borrows within five weeks.

Centralized Finance (CeFi) Lending

CeFi lending reached $24.37 billion by Sept. 30, growing 37.11% from the previous quarter.
Tether holds a 59.91% share of the CeFi market with $14.6 billion in secured loans.
The top three lenders, Tether, Nexo, and Galaxy, control 75.66% of tracked CeFi lending.

A major liquidation event occurred on Oct. 10, 2025, with over $19 billion in perpetual futures positions liquidated. The majority of liquidations came from Hyperliquid, Bybit, and Binance.

Galaxy Research attributes the liquidation event to exchanges' automatic risk control systems rather than systemic credit weakness.

Current cycles are characterized by collateralized lending standards and transparency, distinguishing them from 2021's uncollateralized and opaque practices.