Crypto-backed debt hit a new all-time high in Q3 2025, driven by onchain borrowing as lending apps now dominate 80% of the market—marking a far more disciplined environment than the 2021–22 leverage boom.

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"...onchain lending now occupies a much larger share of the total lending market; at the end of Q4 2021, onchain borrowing through lending applications such as Aave and collateralized debt position (CDP) stablecoins such as DAI made up 48.6% of the market. Today, these avenues own 66.9%. Within onchain borrowing, there has also been a notable shift in the balance between lending apps and CDP stablecoins. At the end of Q3 2025, lending applications accounted for more than 80% of the onchain market, with CDPs at just 16%, compared to 53% in Q4 2021. This is a notable shift away from synthetic, crypto-backed stablecoins towards the lending out of centralized stablecoins like USDT and USDC."

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Crypto-backed debt hit a new all-time high in Q3 2025, driven by onchain borrowing as lending apps now dominate 80% of the market—marking a far more disciplined environment than the 2021–22 leverage boom.

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Crypto-backed debt hit a new all-time high in Q3 2025, driven by onchain borrowing as lending apps now dominate 80% of the market—marking a far more disciplined environment than the 2021–22 leverage boom.

More coverage

Explore the topic

More on Leverage

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Europe is about to list 3x long and short Bitcoin and Ethereum ETFs, giving traders extreme leverage at a time when markets are already sliding. LeverageShares’ products hit the SIX Exchange next week, adding fuel to an already volatile environment.

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Bitcoin and Ether treasury firms like Metaplanet, Lite Strategy, and ETHzilla are kicking off a $500M-plus buyback wave, signaling a shift toward corporate-style capital optimization as digital asset treasuries blend BTC leverage with traditional equity management.

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