DeFi lending shifts as Compound pivots to institutions and Base grows liquidity

The decentralized finance (DeFi) lending landscape is seeing significant shifts as major protocols and networks pivot their strategies. Compound has approved a $52 million development budget to facilitate an institutional pivot. This move involves rebuilding leadership with traditional finance veterans to target banks and asset managers rather than retail users. Despite the announcement causing a 10% rise in its native token, COMP, Compound’s total value locked (TVL) has declined to approximately $1.2 billion, down from its $12 billion peak in 2021.

Simultaneously, Coinbase’s Layer 2 blockchain, Base, has emerged as a major player in onchain lending. Base currently holds roughly $3.28 billion in lending TVL, driven largely by Morpho’s deployment, which accounts for approximately $3.3 billion in TVL. The ecosystem is heavily concentrated around USDC, which makes up nearly 85% of Base’s stablecoin market cap. Curated USDC vaults on the network hold about $1.62 billion, representing over 22% of the global market for such vaults. Much of this growth is attributed to Coinbase’s DeFi Earn product, which has integrated Morpho and Steakhouse Financial to drive significant deposit and borrowing activity.