Ethereum DeFi Lending Surges 20% to $24B in June

Ethereum, the leading blockchain platform for decentralized finance (DeFi), has reached an all-time high valuation of active loans, driven by the peak of the DeFi sector's growth. This milestone highlights Ethereum's dominance in the DeFi space, where it hosts the most mature ecosystem and offers the best liquidity among all public chains. The platform's robust security and extensive network of decentralized applications (dApps) have attracted a significant amount of capital, fueling the surge in active loans.

The recent Pectra hard fork, activated on May 7, 2025, has further enhanced Ethereum's capabilities. This upgrade, which includes a total of 11 Ethereum Improvement Proposals (EIPs), represents the most substantial enhancement to the Ethereum network to date. The Pectra hard fork aims to improve the network's scalability, security, and efficiency, making it more attractive for DeFi projects and users alike.

The surge in active loans on Ethereum can be attributed to several factors. Firstly, the platform's high security level ensures that users' funds are safe, which is crucial for the growth of the DeFi sector. Secondly, Ethereum's mature DeFi ecosystem provides a wide range of financial services, including lending, borrowing, and trading, which cater to the diverse needs of users. Lastly, the platform's excellent liquidity ensures that users can easily enter and exit positions, making it an ideal choice for DeFi activities.

The growth of DeFi on Ethereum has also been fueled by the increasing demand for decentralized financial services. As traditional financial institutions face challenges such as high fees and lack of accessibility, users are turning to DeFi platforms for more efficient and inclusive financial services. Ethereum's DeFi ecosystem, with its wide range of dApps and protocols, has emerged as a leading provider of these services, attracting a growing number of users and capital.

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, with over $35.29B in collateral locked. Lending as a whole locks in $55.45B when accounting for collateral deposits. 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.

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.

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.