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Credit DeFi protocols have surpassed DEX in volume.
Credit DeFi protocols outperformed DEX in volumes
The volumes of funds in credit DeFi protocols in the current market cycle have reached record levels, while decentralized exchanges (DEX) continued to lose ground.
For comparison: the volume of locked value in DEX decreased from $85.3 billion in November 2021 to $21.5 billion at the time of writing.
The founder of the Apollo Capital fund, Henrik Andersson, linked this to the fact that lending has become the only sustainable source of income in DeFi. According to him, DEX liquidity pools are losing their appeal due to impermanent losses and increased competition.
The "capital-efficient" design of Uniswap v3 allows for greater earnings with smaller investments, but this reduces the overall TVL, Andersson noted. He explained that intent swaps, where liquidity is sourced from centralized exchanges (CEX), are pulling funds away from DEX.
Lending protocols like Aave offer holders of Ethereum and stablecoins an annual yield of 1.86% to 3.17%. In DEX pools, the profit is higher but volatile and depends on daily fluctuations.
The share of DeFi lending in the market reached 65% by the end of 2024, surpassing centralized platforms. This occurred after the bankruptcies of Celsius, BlockFi, and other CeFi players, which reduced the market by 78% from the peak in 2022.
According to Galaxy Digital, the volume of loans in DeFi has increased by 960% since the end of 2022.
Recall that in Q1 2025, the TVL of DeFi protocols fell by 27%, the trading volume of NFTs decreased by 24%, and social and AI applications showed the highest growth.