The Scoop: DeFi surges as the new face of crypto lending while CeFi stagnates
Quick Take At The Block’s Emergence conference, the CEOs of Abra and Arch, both active in crypto lending, shared insights into the current landscape. This column is adapted from The Scoop newsletter.
At The Block’s Emergence conference , the CEOs of Abra and Arch, both active in crypto lending, shared insights into the current landscape. Their message was clear: while centralized finance (CeFi) lending has dwindled, decentralized finance (DeFi) lending is surging.
DeFi’s Comeback Story
Ethereum’s DeFi lending ecosystem has seen remarkable growth in recent weeks. Total value locked (TVL) in lending protocols has reached new highs, driven by protocols like Aave v3 and Spark v1.
Aave v3: Leading the resurgence, Aave v3 expanded its TVL from $16.5 billion to $27 billion between Nov. 5 and Dec. 5. Its success stems from features like cross-chain functionality and improved capital efficiency, making it the dominant player in DeFi lending.
Spark v1: This protocol also saw substantial growth, with its TVL nearly doubling from $4.5 billion to $8 billion in the same period.
This surge in lending activity aligns with broader strength in DeFi tokens. The GMCI DeFi Index, which tracks key DeFi assets, jumped from $73 to $155 throughout November.
CeFi Lending’s Uncertain Future
Meanwhile, the CeFi lending market remains a shadow of its former self. With Genesis gone, the appetite for undercollateralized loans has evaporated, replaced by a more conservative, risk-aware approach. While this shift might seem like a headwind for the market, it’s actually a long-term tailwind: asset prices are no longer inflated by risky loans.
Looking Ahead
The lending market’s evolution underscores a broader trend in crypto: the industry is moving away from the reckless speculation of the past toward a more resilient and transparent financial ecosystem. DeFi’s recent growth highlights its potential to fill the void left by CeFi’s decline, signaling a new era for crypto lending where caution and innovation coexist.
The Block’s Frank Chaparro serves up the latest headlines, charts, trends, and views on crypto and DeFi from around The Block, Twitter, and The Scoop pod. Subscribe to The Scoop newsletter , which hits inboxes on Tuesday and Friday mornings.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
You may also like
Powell: Employment is weakening, inflation remains high, and no one is talking about rate hikes now
Powell pointed out that the U.S. labor market is cooling, with hiring and layoffs slowing down and the unemployment rate rising to 4.4%. Core PCE inflation remains above the 2% target, but service inflation is slowing. The Federal Reserve has cut interest rates by 25 basis points and started purchasing short-term Treasury bonds, emphasizing that the policy path needs to balance risks between employment and inflation. Future policies will be adjusted based on data. Summary generated by Mars AI. This summary is produced by the Mars AI model, and the accuracy and completeness of its generated content are still in the process of iterative improvement.
$RAVE TGE Countdown: When Clubbing Becomes an On-Chain Economic Activity, the True Web3 Breakthrough Moment Arrives
RaveDAO is rapidly growing into an open cultural ecosystem driven by entertainment, becoming a key infrastructure for Web3 to achieve real-world adoption and mainstream breakthrough.
A "hawkish rate cut" that's not so "hawkish," and balance sheet expansion that's "not QE"
The Federal Reserve has cut interest rates by another 25 basis points as expected, still projecting one rate cut next year, and has launched an RMP to purchase $40 billion in short-term bonds.
Trending news
MoreCrypto prices
More
