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The scale of the encryption lending market is 36.5 billion USD, and the DeFi sector has increased by 959% to become dominant.
Crypto Assets Lending Market Report: Scale Reaches 36.5 Billion USD, Significant Rise in Decentralized Finance
The recently released report on the "Status of Crypto Assets Lending" comprehensively analyzes the development of the crypto lending market. As of the fourth quarter of 2024, the total scale of the crypto lending market reached $36.5 billion, a 43% decrease from the peak of $64.4 billion in the fourth quarter of 2021. Nevertheless, the decentralized finance (DeFi ) lending sector has performed outstandingly, showing a significant rebound from the bear market low.
The report indicates that the current market is mainly composed of three parts:
The CeFi lending market is highly concentrated, with the top three institutions Tether, Galaxy, and Ledn accounting for 88.6% of the market share. Among them, Tether alone occupies about 73%, reaching a scale of 8.2 billion USD.
In contrast, the DeFi lending sector shows a strong rise. Since the low point of $1.8 billion in the fourth quarter of 2022, DeFi lending has risen by 959% over eight quarters, reaching a scale of $19.1 billion. This growth is attributed to the permissionless nature of DeFi platforms and the resilience demonstrated during market turbulence.
Overall, the Crypto Assets lending market is undergoing structural changes. The market share of DeFi lending has risen from 34% during the bull market of 2020-2021 to the current 63%. If CDP stablecoins are included, on-chain lending accounts for 69% of the entire market. This indicates that on-chain lending is gradually becoming the dominant force in the market.
In the future, the crypto lending market may present the following trends:
CeFi lending will become more institutionalized, with traditional financial institutions expected to enter the market.
On-chain private lending may rise, and tokenized debt instruments will enhance transparency.
Decentralized Finance will further develop, attracting more institutional participants.
Market differentiation will continue, Decentralized Finance is expected to maintain a dominant position, while CeFi may revive due to institutional entry.
On-chain lending will become a core component of digital financial infrastructure.
Overall, although the market size is still below historical highs, the crypto lending market is developing towards a more transparent, standardized, and institutionalized direction. The rapid rise of DeFi lending is particularly noteworthy, indicating the potential of decentralized finance models. However, market participants must remain vigilant about potential risks, including factors such as asset price volatility and regulatory uncertainty.