CeFi Surpasses DeFi for First Time Since 2023 as Crypto Lending Market Contracts

The crypto-backed lending market declined by 17% in Q2 to $56.16 billion, according to Galaxy Research data.

This marks a continued deleveraging trend, with the figure now 40.13% below its peak of $78.69 billion in Q3 2025.

DeFi lending contracted sharper than CeFi, falling 27.61% quarter-over-quarter to $20.43 billion, while CeFi declined by a more moderate 9.62% to $22.98 billion.

This shift pushed CeFi lending ahead of DeFi for the first time since Q3 2023, signaling a notable change in market preference.