The interconnections between centralized and decentralized cryptographic loans increase the systemic risk, said the galaxy digital search branch in a June 4 report on Borrowing data from the first quarter.
The report estimated that on March 31, more than $ 39 billion in crypto-collateralized debt were in circulation in decentralized loan applications, centralized lenders and stabing transmitters supported by Crypto.
Protocols DEFI represented 45.3% of the total centralized sites represented 34.6% and the stable guarantees represented 20.1%.
According to the report, many centralized offices increase short -term liquidity on Defi Rails, then lend the funds outside the chain.
This duplication causes the same debt obligation to appear in the data on the chain and private registers, artificially inflating titles figures and complicating risk assessments in real time during market stress.
Crossed liquidations
Net price reductions often trigger automated liquidations on the DEFI platforms first, because intelligent contracts immediately apply margin rules.
The centralized offices that borrowed from DEFI can then react by recalling loans or by liquidating customer guarantees on the scholarships, putting pressure on prices.
These forced sales strengthen the market, deepen volatility and trigger additional liquidations on the chain, especially for assets such as Bitcoin (BTC), Ethereum (ETH) and ETH ETH (Steth) which are widely used in the premises.
Pendle Tokens presented this reflexivity during the second quarter. After AAV allowed a high value loan guarantee, users have deposited nearly $ 1.4 billion and borrowed from the stalls, which made the total DEFI offer greater than $ 54 billion on May 26.
If prices drop, mass liquidations could go back to centralized offices with mirror exhibitions.
Treasury funded by debt
Meanwhile, business treasury bills have added another layer of credit to the system.
The report identified at least $ 12.7 billion in convertible and zero coupon tickets issued by listed companies to finance Crypto Holdings. The list of companies includes a strategy, riot platforms and twenty-one capital.
The strategy alone owes $ 8.2 billion and pays $ 17.5 million in quarterly interest. Most of the notes ripen between mid-2017 and the end of 2028, creating a refinancing bump which coincides with the debt carried by peers pursuing similar cash policies.
To manage short-term bonds, many companies are based on over-the-counter Stablecoin loans, generally evaluating 2% to 4% above the challenges of challenges in force. The narrow gap indicates that centralized offices are actively compared against DEFI, connecting private credit costs to chain conditions.
When the DEFI prices change, the over -the -counter borrowing costs are adapted quickly, tightening the margin requirements for borrowers of the Treasury and the other participants.
Galaxy concluded that although the diversification of credit channels increases the borrowing capacity, it has also strengthened the transmission of shocks through the system.
In the absence of standardized disclosure or award on the chain for exhibitions at the entity level, regulators and market players remain in the ignorance of the entire scope of the risks integrated into the cryptographic credit markets.
