A new report from Galaxy Digital reveals some surprising names at the top of the crypto lending game. Let’s break it down.
Tether Dominates Centralized Lending
Tether, the well-known stablecoin issuer, takes the crown as the biggest centralized finance (CeFi) lender. Coming in second and third are Galaxy Digital itself and Ledn, a Bitcoin lending firm. Together, these three giants controlled nearly $10 billion in loans at the end of 2024 – a whopping 89% of the CeFi lending market and 27% of the entire crypto lending market. Coinbase, a major US crypto exchange, rounds out the top four.
CeFi Lending Market Shrinks, DeFi Booms
Galaxy Digital’s head of research points out that the total CeFi loan book dropped significantly in 2024, down 68% from its peak in 2022. The total value at the end of 2024 was around $11.2 billion.
However, the decentralized finance (DeFi) lending sector tells a different story. DeFi lending saw a massive 959% increase since its low point two years earlier, reaching $19.1 billion by the end of 2024.
Why DeFi is Winning
Galaxy’s analysts believe DeFi’s success is due to its open and permissionless nature. Unlike many CeFi lenders that failed during the recent crypto downturn, DeFi lending platforms largely survived and continued to operate. This resilience highlights the benefits of DeFi’s algorithmic, over-collateralized approach and its reliance on supply and demand.
In short: While Tether and Coinbase are major players in the shrinking CeFi lending space, the DeFi sector is thriving and showing impressive growth.
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