Crypto lending market shrinks to $56.16 billion as CeFi surpasses DeFi in Q2 2026

Crypto lending continues to split into two primary approaches: onchain lending powered by blockchain protocols and centralized loans administered by companies. The distinction centers on who holds collateral, sets terms, and manages the risks involved. Recent developments highlight how hybrid products increasingly blur these lines, while overall market activity has shifted between decentralized finance (DeFi) and centralized finance (CeFi) platforms. Onchain lending involves providing cryptocurrency collateral to a smart contract or lending protocol, where programmed rules govern the relationship. These platforms—such as Aave V3—require borrowers to deposit more collateral than the funds they wish to borrow.

Source: CoinTurk News