Stablecoin issuer Tether dominates the CeFi lending space with $14.6 billion in open loans, capturing 60% market share as of Sept. 30.
Crypto News
Centralized finance lending markets hit $25 billion in outstanding loans during the third quarter, the highest level in over three years, with transparency-focused platforms leading the sector's recovery.
The crypto lending market has expanded more than 200% since the beginning of 2024, according to Galaxy Research data. The Q3 figure represents the highest total since Q1 2022, though it remains below the previous peak of $37 billion.
Galaxy’s head of research, Alex Thorn, stated Sunday that the current landscape features significantly more transparency compared to prior market cycles. Thorn expressed pride in the data contributions from lending platforms now providing regular disclosures.
Stablecoin issuer Tether dominates the CeFi lending space with $14.6 billion in open loans, capturing 60% market share as of Sept. 30. Nexo and Galaxy ranked second and third with $2 billion and $1.8 billion in loans, respectively, according to Galaxy's report.
The previous market cycle peak featured Genesis, BlockFi, Celsius, and Voyager as dominant players. All four platforms suffered significant impacts from exposure to FTX, which collapsed in November 2022. Celsius filed for bankruptcy in July 2022 primarily due to Three Arrows Capital exposure.
Thorn argues the vacuum left by FTX-linked platform exits has been filled by operators with healthier practices. Tether publishes quarterly attestations while Galaxy and Coinbase present data through public financial reports. Nexo proactively provides information to Galaxy Research.
CeFi lenders adopted more conservative approaches following the 2022 collapses. Uncollateralized lending has largely disappeared as surviving firms implemented stricter risk controls, full collateralization standards, and greater transparency to attract institutional capital.
Decentralized finance applications reached a new quarter-end record in Q3 with $41 billion in outstanding loans, growing 54.8% according to an October report. Combined with CeFi lending venues, total crypto-collateralized borrows hit $65.4 billion at quarter-end, establishing a new all-time high.
The shift toward transparency and conservative lending practices marks a departure from the previous cycle. Industry observers note the current market structure emphasizes disclosure and risk management over aggressive growth strategies that characterized earlier periods.
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