Crypto Loans Hit Record $73.6B as DeFi Dominates Market
Crypto loans have reached a record $73.6 billion in Q3 2025, allowing holders to borrow against their assets without selling them. This mechanism is simpler than most beginners expect: deposit cryptocurrency as collateral, receive a loan in stablecoins or cash, repay with interest, and get your crypto back.
The market has split into two camps: centralized platforms (CeFi) like Nexo and Ledn, and decentralized protocols (DeFi) like Aave and Compound. DeFi now commands roughly two-thirds of all lending activity, with Aave being the dominant protocol by a wide margin. It crossed $1 trillion in cumulative lending volume in early 2026.
Overcollateralization is standard, most borrowers must lock up more value than they receive, and liquidation risk remains the biggest danger. The Oct. 10, 2025 market crash illustrated this at scale: $19.16 billion in positions were liquidated across the market, affecting over 1.6 million traders.