Crypto users could seek a more sustainable yield this cycle, because the total value locked in decentralized financial loans (DEFI) continues to reach new peaks while decentralized exchanges (DEX) have lagged behind.
The DEFI loan protocols are currently the main vertical TVL DEFI at 53.6 billion dollars, which represents 43% of the $ 124.6 billion locked on all DEFI protocols. The figure also exceeds liquid stimulate.
Multichain Lending Protocol Aave currently has $ 25 billion in locked value, representing almost half of the DEFI loans market.
In striking contrast, Dexs, which once held almost double the TVL of their closest competitor, increased from $ 85.3 billion in November 2021 to $ 21.5 billion today.
Explaining the increase in the loans of DEFI and falling into DEX TVL, the founder of Crypto Fund Apollo Capital, Henrik Andersson, told Cintelegraph that loans are undoubtedly “the only lasting means of producing a yield” in DEFI, because the pooling of DEX liquidity has become largely not profitable due to the impermight loss.
He also argued that the more “effective” more “effective” design of DEX V3 of the industry, compared to the UNISWAP V2, may have contributed to the DEX TVL fall, because liquidity suppliers can now earn more awards with fewer initial capital.
Andersson also pointed out that the rise in intention -based exchanges – a relatively new cross trading mechanism – may still have reduced TVL DEX, because market manufacturers generally come from the liquidity of centralized exchanges to facilitate these exchanges.
The Defi loan protocols like Aave and Compound Finance allow Crypto users to lend assets to win interest or borrow against guarantees. Intelligent contracts manage deposits, loans and interest rates to guarantee transactions without confidence.
DEFI users who provide Ether (ETH) and Tether (USDT) to AAVE, for example, are currently gaining an annual percentage return of 1.86% and 3.17%, respectively.
The provision of stablescoins and ether to dex pools such as United Uniswap can offer higher rewards; However, as Andersson pointed out, they are much less durable, fluctuating day by day.
DEFI now dominates CEFI on the Crypto loans market
The CRYPTOGRAPHY BASED BASED BEFULDSED APPROACH APPROVAL 65% of the total market by the end of 2024 and have increased or maintained its market share against centralized lenders each quarter since the fourth quarter 2022, an April report of the investment company of Crypto Galaxy Digital.
The fall began to occur at the time when several centralized cryptographic lenders such as Genesis, Celsius Network, Blockfi and Voyager fell bankrupt, causing the massive fall in TVL.
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Their collective fall resulted in an collapse estimated at 78% of the size of the cryptography loans, from the peak of 2022 to the hollow of the bear market, noted Galaxy.
However, it was DEFI loan protocols that carried out the resurgence of the cryptographic loan activity, noted Galaxy, pointing to an increase of almost 960% of the open borrowing between Q4 2022 and Q4 2024.
Galaxy said that the high resumption of the DEFI loan market is a testimony to the risk design and management practices adopted by the DEFI loan protocols while presenting the advantages of algorithmic, overly -legged and supply and demand borrowing models.
Galaxy expects increased institutional participation and clearer regulations stimulate the next wave of cryptographic loans.
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