Post-2022 Caution Drives DeFi's Collateralized Renaissance-DWF Leads Charge

DWF Group, a leading player in the digital finance sector, is set to launch a new fund with a target size of $30–75 million, focusing on decentralized finance (DeFi) and centralized-decentralized finance (CeDeFi) products. The move underscores growing investor confidence in blockchain-based lending and borrowing platforms, which have seen record growth in 2025. The fund's strategy aligns with broader market trends, including the rapid expansion of on-chain lending and the structural shift toward collateralized credit models according to market analysis.

Crypto-collateralized lending reached an all-time high of $73.59 billion at the end of Q3 2025, according to Galaxy Research. DeFi protocols now capture 66.9% of the total lending market, up from 48.6% four years ago. This growth is driven by factors such as points farming incentives, improved collateral assets like Pendle Principal Tokens, and rising cryptocurrency prices, which allow users to borrow more against existing holdings. The Aave DeFi lending platform, for instance, dominates the Plasma blockchain with 68.8% market share, attracting over $3 billion in outstanding borrows within five weeks of its launch.

The fund's focus on CeDeFi reflects a hybrid approach that bridges traditional finance and decentralized systems. Centralized finance (CeFi) lending, while smaller, remains a critical component, with Tether alone holding $14.6 billion in secured loans as of September 30, 2025. However, the 2022 credit implosions in CeFi have pushed lenders toward fully collateralized models, a trend that DWF's fund appears poised to capitalize on.

DeFi Technologies revised its guidance amid a CEO transition, projecting a CA$6.40 fair value per share based on a 62.4% annual revenue growth rate. While such moves underscore execution risks, they also signal long-term potential for platforms that can navigate regulatory and operational challenges.

Investors are increasingly prioritizing transparency and security, particularly after the 2022 crises. The shift toward collateralized models has reduced systemic risks, with CDP stablecoins (like DAI) accounting for just 16% of on-chain borrowing activity. Instead, lending applications now dominate 80% of on-chain activity, reflecting a preference for asset-backed credit.

The competitive landscape remains dynamic. DeFi lending applications surged to $40.99 billion in Q3 2025, expanding by $14.52 billion quarter-over-quarter, while CeDeFi's share of the market continues to grow. DWF's fund will likely target projects that leverage AI-driven risk assessment, automated liquidity protocols, and cross-chain interoperability-areas where Galaxy Research identifies structural advantages for on-chain lending.

DWF's entry into this space comes as global markets anticipate further innovation. The Class D Audio Amplifier Market, for instance, is projected to grow at 8.4% CAGR through 2032, illustrating broader trends in technology-driven efficiency. Similarly, the Radiology AI Market, expected to reach $2.27 billion by 2030, highlights the role of AI in optimizing complex systems-a parallel that DeFi platforms may soon mirror.