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Cryptopolitan 2025-07-04 12:30:07

Ethereum rides DeFi peak to all-time high valuation of active loans

Active loans on Ethereum returned to all-time highs, signaling renewed confidence in the network and its lending protocols. The trend was driven by Aave, but other smaller lenders saw significant growth in the past weeks. Lending on Ethereum continues to rise, surging to a new all-time high. Depending on different metrics, total active loans range between $22.6B and over $24B , with a different selection of protocols included. Based on TokenTerminal data, the trend of expanding lending returned since April, with around $2B in active loans added in June. DeFi lending improved on its recent three-year peak , retaining the growth trend in July. Ethereum remains the leader in DeFi lending Lending as a whole locks in $55.45B when accounting for collateral deposits. Ethereum lending is also at an all-time high, with over $35.29B in collateral locked. Base is the other chain expanding its lending activity, with over $2B in collateral locked. Despite the popularity of TRON and Solana-based DeFi, lending on those chains is far from the all-time peak. Ethereum active loans have surged again, peaking at an all-time high of over $22.6B, or up to $24B depending on metrics and protocols included. In June, DeFi lending added $2B in active loans. | Source: Token Terminal Hyperliquid is one of the contenders with the fastest expansion, carrying $848.53 in value locked. While the protocol is still far from the existing leaders, it is catching up quickly to previously popular chains. Lending has proven its resilience, expanding even with ETH fluctuations. In 2025, DeFi improved its liquidation approach, rarely crashing with ETH price moves. The expansion of lending reveals the ongoing confidence in ETH and the protocols themselves. The recent rally is mostly based on inflows to Aave , which became the leading lending hub. However, recovery has been even stronger for smaller protocols. Following a weaker period, Spark recovered with over 40% in new loans since the April lows. Aave remains the leading lending protocol with $15B in active loans, followed by Spark, carrying $1.8B after the recovery. ETH liquidation levels rose on increased confidence With more active lending, the ETH market carries $1B in liquidable loans. This time, borrowers remain relatively conservative, with liquidity accrued at the $1,600 level or lower. This means that even if ETH slides by 20%, lenders will see only $4.2M in liquidated loans. ETH traded at $2,550.08, showing no signs of a deeper correction. However, the asset has not rallied above $3,000, instead stalling under $2,700. The relatively predictable ETH valuation has helped DeFi retain its growth, with lending expanding beyond the levels of the 2021 bull market. Despite the growing value of lending protocols, locked ETH has decreased. Over $100B in ETH was locked in DeFi as of November 2021, with around $62B in ETH locked in July 2025. Lending has grown with more widely accepted collateral in the form of stablecoins and other tokens. DeFi is seen as capable of even more active development, especially with more lenient regulations in the USA and the ability to experiment with yield protocols. The increasing supply of stablecoins, as well as the minting of RWA tokens may further boost DeFi apps. Others, like Morpho, are offering fixed-rate, fixed-time loans , making DeFi more user-friendly and predictable. Cryptopolitan Academy: Want to grow your money in 2025? Learn how to do it with DeFi in our upcoming webclass. Save Your Spot

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