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- DeFi borrowing has increased by more than 950%, according to Galaxy Digital
- A Galaxy Digital report scrutinized activities on 20 DeFi protocols on 12 blockchains
- CeFi crypto lending, however, has dropped by more than 40%
A report by Galaxy Digital shows that DeFi borrowing has increased by more than 950% between Q4 2022 and Q4 2024 to reach over $19 billion. Galaxy Digital revealed that decentralized entities control borrowing while centralized protocols flood lending. Tracking borrowing and lending activities on 20 platforms spread across 12 blockchains, the report revealed that CeFi crypto lending registered a 40% drop, a sign that centralized crypto platforms were extremely affected by the prolonged bear market compared to their decentralized counterparts.
DeFi Trumps CeFi
The report noted that DeFi platforms have an upper hand over centralized platforms because they benefit from “algorithmic, overcollateralized, and supply/demand-based borrowing.”
The report noted that most borrowers use the funds to conduct leveraged trading, refinance other loans, and finance operations. While DeFi borrows reach over $19 billion, CeFi borrows stand at slightly above $11 billion.
Galaxy Digital disclosed that CeFi-based activities were affected by the bear market, which forced notable players like Celsius, BlockFi, Voyager, and Genesis to go bankrupt, taking down 40% of “the entire crypto lending market and 82% of the CeFi lending” with them.
Galaxy, Tether, and Ledn Dominate CeFi Lending
According to the report, Ledn, Galaxy, and Tether dominate the current CeFi lending market with a combined loan book size of close to $10 billion as of Q4 2024.
The report comes at a time when DeFi protocols are rebranding to expand their offerings. The latest such platform is ParaSwap, which rebranded to Velora to introduce intent-based trading and align with an evolving DeFi ecosystem. Solend also rebranded to Save to introduce new features and explore the memecoin market.
With DeFi borrowing and lending recovering from the 2022 lows, it’s to be seen whether it’ll encourage CeFi platforms to consider shifting to the decentralized world.
