The cryptography loan market rebounds compared to its 2022 accident, decentralized platforms leading the charge while centralized players have trouble finding lost land.
The discovery comes from
Galaxy, which creates tailor -made centralized financial products and decentralized financial products for investors, commercial companies, hedge funds and other institutional customers, said decentralized platforms (DEFI) have led the rebound.
As its name suggests, centralized platform loans or CEFI loans involve centralized institutions – negotiation companies, scholarships or cryptographic banks – which manage custody, EFP users and set loan conditions. These lenders often operate behind closed systems, requiring confidence in the platform and its risk management.
Defi Lending, on the other hand, uses smart contracts to automate loans and loans on public blockchains. Protocols like Aave, Compound and Makedao allow anyone with a cryptographic wallet to participate, and loans are generally overleralized, users loving cryptographic assets to borrow stablescoins or other tokens.
DEFI conducts market growth
In the fourth quarter of 2024, the total value of centralized and decentralized cryptographic loans was $ 36.5 billion, with decentralized platforms representing more than 60% of this loan at 19.1 billion dollars. Galaxy stressed what he described as the “nature without authorization” of deffi loans as a key factor stimulating market growth. The company said that the largest chain loan applications continued to operate even during a market slowdown in 2022 which affected certain centralized platforms.
Galaxy attributes the resilience of deffi loans to blockchain applications, contrasting it with centralized lenders such as Genesis, Celsius Network, Blockfi and Voyager, which have been faced with liquidity and bankruptcy crises.
“Unlike the greatest lenders (centralized finances) which have gone bankrupt and which no longer work, the largest loan applications and the markets were not all forced to close and continued to operate,” said the Galaxy report. “This fact testifies to the risk design and management practices of large chain loan applications and the advantages of algorithmic, overcrowded and supply / demand.”
By the fourth quarter of 2024, DEFI loan requests represented 63% of the total cryptographic loans, against a previous summit of 34% in 2021. This change marks a growing preference for chain solutions in the middle of a broader uncertainty of the market, according to Galaxy.
The collapse of cryptographic loans from 2022
The 36.5 billion dollars in cryptographic loans in 2024 are far from the peak of the market of $ 64.4 billion at the end of 2021, shortly before the fall of FTX, the world capital of Genesis, whose bankruptcy in 2023 sparked a cascade of collapse on the crypto loan market.
As part of a trial brought by the Prosecutor General of New York, Letitia James last year, regulators alleged that Genesis, Gemini and the digital currency group had hidden more than a billion dollars in losses. The repercussions affected hundreds of thousands of users, including around 29,000 in New York. Gemini finally returned more than $ 50 million to investors and terminated his gay program.
This collapse was preceded by two actions by the Securities and Exchange Commission (SEC) against other cryptographic lenders. On September 7, 2021, Coinbase revealed that it had received an opinion from the SEC that the Commission had concluded that an cryptographic loans program that the company had announced was a title, therefore Coinbase would be in violation of federal laws on securities if it proceeded. Faced with the threat of the application, Coinbase ended the program.
Similarly, in February 2022, the SEC billed and installed with Blockfi loans on the so -called company’s failure to record the offers and sales of its retail crypto loan, Blockfi Interest Accounts (BIAS), as a guarantee. Blockfi has agreed to pay a penalty of $ 50 million at the dry and stop its unregistered offers and sales.
Since these developments, Tether has become the dominant actor on the centralized platform market offering cryptographic loans, by a large margin. In the fourth quarter of 2024, it represented more than 70% of the centralized platform loans market, exceeding distant competitors. The largest platform, Galaxy, had less than 10%, according to the platform report.
Legislators, bankers working on cryptographic legislation
The crypto world has renewed optimism under President Donald Trump, who has
However, the banks have so far been more cautious. The American Bankers Association, for example,
