DeFi Lending Platform Total Borrowings Plummet 23% in a Single Week to Three-Month Low

Total borrowings on the DeFi lending platform plunged 23% in a single week to $18.2 billion, a three-month low, driven by sharp volatility in the cryptocurrency market, according to CoinDesk. The size of borrowings on major agreements Aave and Compound shrank by 28 per cent and 19 per cent respectively, reflecting the fact that traders are deleveraging on a massive scale. Analysts noted that spreading panic in the market has led investors to prioritise loan repayments over new borrowing, a trend that could further exacerbate the liquidity crunch if it continues.