Crypto Lending Volume Returns to All-Time Highs
The crypto-asset-backed lending market reached a new all-time high at the end of the third quarter of 2025, even surpassing the long-term peak seen in the fourth quarter of 2021. Unlike the previous cycle, this round of growth is primarily driven by on-chain lending (DeFi lending). Relevant on-chain data shows that the share of on-chain lending in the overall lending market has surged significantly from 48.6% in Q4 2021 to 66.9%. Among this, on-chain lending applications account for over 80% of the on-chain market share, while collateralized debt positions (CDPs) make up approximately 16%. Readers looking to track real-time market movements can also check out relevant market quotes and data support on Svmuu.
Structural Shift Between CeFi and On-Chain Markets
Looking back at the credit crisis of 2022, unsecured or undercollateralized lending in the centralized lending (CeFi) sector triggered large-scale cascading liquidations. However, after undergoing industry consolidation, CeFi lenders have generally shifted to fully collateralized standards. Relationship-based blind credit has become extremely rare, and institutions have significantly strengthened internal risk controls through self-regulation. At the same time, the transparency and over-collateralization mechanisms of on-chain lending have also reshaped the overall risk exposure profile of the market.
Assessment of Market Leverage and Liquidation Risks
Despite the continuous expansion of lending scale, institutional analyses generally point out that the current leverage structure is fundamentally different from the past. According to observations from institutions like Galaxy, the current peak in crypto-asset lending does not directly equate to a systemic crisis. This is because the current quality of collateral (dominated by mainstream assets such as Bitcoin and Ethereum) and the purposes of borrowing show distinct differences from the highly speculative, undercollateralized cycle of 2021. Nevertheless, market volatility persists; for instance, the futures market experienced massive liquidations in October 2026, with over $19 billion in perpetual contract positions wiped out in a single day, reminding market participants of the urgency of leverage management.
