Cointelegraph by Zoltan Vardai
Decentralized lending protocols are surging in total value and set to capitalize on the growing institutional adoption of stablecoins and tokenized assets, according to Binance Research.
Decentralized finance (DeFi) lending protocols are automated systems that facilitate lending and borrowing for investors via smart contracts, eliminating the need for financial intermediaries like banks.
DeFi lending protocols have risen more than 72% year-to-date (YTD), from $53 billion at the beginning of 2025 to over $127 billion in cumulative total value locked (TVL) on Wednesday, according to Binance Research.
This explosive growth is attributed to DeFi lending protocols benefiting from accelerated institutional adoption of stablecoins and tokenized real-world assets (RWAs).
“As stablecoin and tokenized asset adoption accelerates, DeFi lending protocols are increasingly positioned to facilitate institutional participation,” wrote Binance Research in a Wednesday report shared exclusively with Cointelegraph.
A significant portion of this growth was attributed to Maple Finance and Euler, which saw 586% and 1,466% rises, respectively.
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DeFi lending to capture more institutional participation from RWA collateral adoption
Binance Research sees DeFi lending protocols as growing facilitators of institutional participation, specifically due to the launch of institutional-grade products, such as Aave Labs’ Horizon.
Horizon is an institutional lending market that enables borrowers to use tokenized RWAs as collateral for stablecoin loans.
Products like Horizon “aim to unlock new liquidity and convert RWAs into productive assets within the decentralized finance ecosystem,” added the report.
Tokenized financial products, such as private credit and US Treasury bonds, have become a focal point for institutions. Tokenized private credit represents the majority, or $15.9 billion, of the total $27.8 billion RWAs onchain, followed by $7.4 billion worth of US Treasurys, according to data from RWA.xyz.
Related: Corporate crypto treasury holdings top $100B as Ether buying accelerates
Some RWA protocols enable the use of yield-bearing tokenized US Treasury products as collateral for multiple DeFi activities.
Still, using US Treasurys as collateral for leveraged crypto trading created new risk transmission pathways across markets, such as cascading effects for DeFi protocols, according to a June report from rating service Moody’s.
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