DeFi Lending Surges to $127B in 2025 on Stablecoin and RWA Demand

Binance Research reports that total value locked in DeFi lending has surged 72% this year, climbing from $53 billion in January to more than $127 billion today.

Institutional Rails Meet On-Chain Liquidity

Unlike banks, these protocols run on smart contracts, offering investors automated access to borrowing and lending. The growth is being fueled by institutions that increasingly treat stablecoins as payment rails and use tokenized assets — like private credit and U.S. Treasurys — as collateral.

Breakout Protocols and New Products

Some platforms have seen eye-popping gains: Euler’s value has grown more than 1,400% in 2025, while Maple Finance is up nearly 600%. Meanwhile, Aave Labs has launched Horizon, an institutional-grade market that allows tokenized RWAs to back stablecoin loans, creating new liquidity streams for borrowers.

READ MORE:

XRP ETF News: 15 Applications Sit on SEC’s Desk – October is the Key

Tokenization Reshaping DeFi

RWA.xyz data shows $27.8 billion worth of tokenized products now live on-chain, dominated by private credit ($15.9 billion) and Treasurys ($7.4 billion). These yield-bearing instruments are increasingly plugged into DeFi protocols, expanding the scope of what can be collateralized.

Opportunity and Risk

The trend signals DeFi lending is evolving from retail-driven experimentation into a structure built for institutions. Yet it also introduces new vulnerabilities. Analysts at Moody’s warn that using Treasurys to leverage crypto trades could transmit risks back into traditional markets if liquidations cascade across protocols.

For now, though, the numbers tell the story: DeFi lending is scaling rapidly, and tokenization may be the bridge that makes it part of mainstream finance.

The information provided in this article is for informational purposes only and does not constitute financial, investment, or trading advice. Coindoo.com does not endorse or recommend any specific investment strategy or cryptocurrency. Always conduct your own research and consult with a licensed financial advisor before making any investment decisions.

The post DeFi Lending Surges to $127B in 2025 on Stablecoin and RWA Demand appeared first on Coindoo.