Total value locked (TVL) in DeFi lending protocols has reached $53.6 billion, accounting for 43% of the total $124.6 billion in DeFi, while DEXs have seen a drop to $21.5 billion from $85.3 billion in November 2021. Henrik Andersson from Apollo Capital notes that lending is the only sustainable yield option in DeFi since DEX liquidity pooling has become unprofitable. Additionally, the more capital-efficient design of Uniswap v3 has allowed liquidity providers to earn higher rewards with less capital, further contributing to the decline in DEX TVL. The rise of cross-chain trading has shifted liquidity sourcing towards centralized exchanges, impacting DEX volumes. DeFi lending protocols, such as Aave and Compound Finance, have gained significant ground, controlling 65% of the market share in crypto lending by late 2024, spurred by the failures of centralized lenders like Celsius and Voyager. Galaxy Digital also highlights a near 960% increase in DeFi open borrows from Q4 2022 to Q4 2024, illustrating the resilience and growth within DeFi lending.

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