Crypto-collateralized lending market declines to $56.16 billion in Q2

The crypto-collateralized lending market experienced a 16.78% decline in the second quarter, falling by $11.33 billion to reach a total of $56.16 billion. This figure represents a significant drop from the $78.69 billion peak recorded in Q3 2025.

Decentralized Finance (DeFi) lending saw a sharper contraction than Centralized Finance (CeFi). DeFi lending-app balances fell by 27.61% to $20.43 billion, while CeFi loans decreased by 9.62% to $22.98 billion. This shift resulted in CeFi holding a larger share of the market than DeFi for the first time since Q3 2023.

Key protocols and metrics include Aave V3, which held $11.8 billion in active loans, and Morpho, with $5.6 billion. Market-wide, the average borrowing rate for stablecoins was approximately 4.66%, while the average supply rate stood at 3.58%.