Crypto-collateralised lending reached a new all-time high at the end of the third quarter, largely driven by growth in on-chain borrowing. Latest data shows crypto-collateralised lending expanded by $20.46 billion (38.5%) in Q3 2025 to a new all-time high of $73.59 billion, which moves past the previous all-time high of $69.37 billion hit at the end of Q4 2021, according to the latest 'The State of Crypto Leverage – Q3 2025' report by Galaxy Research.

In crypto-collateralised lending, borrowers put their cryptocurrency holdings as collateral to get a loan. This loan can be in any form: fiat currency or stablecoins. Basically, it allows crypto investors to access liquidity without needing to sell their crypto assets.

The Galaxy Research Q3 report shows that on-chain lending now occupies a much larger share of the total lending market. The research report shows that on-chain lending drove a sharp rise in crypto-collateralised borrowing, representing around 66.9% of all crypto-collateralised debt.

At the end of Q4 2021, on-chain borrowing through lending applications such as Aave and collateralised debt position (CDP) stablecoins such as DAI made up 48.6% of the market.

“Within on-chain borrowing, there has also been a notable shift in the balance between lending apps and CDP stablecoins,” the report says. At the end of Q3 2025, lending applications accounted for more than 80% of the on-chain market, with CDPs at just 16%, compared to 53% in Q4 2021, marking a notable shift away from synthetic, crypto-backed stablecoins towards the lending out of centralised stablecoins like USDT and USDC.  

Galaxy Research is tracking more than $12 billion in debt outstanding used to directly buy or supplement the treasury strategies of digital asset treasuries (DATs).

The dollar-denominated value of outstanding loans on DeFi applications set another new quarter-end all-time high in Q3, growing by $14.52 billion (+54.84%) to $40.99 billion. On a combined basis, DeFi lending app and CeFi loans outstanding reached a new all-time high that eclipses the previous high of $53.44 billion in Q4 2021 by $11.93 billion (22.32%), the report says.

Other Key Takeaways  

The debt outstanding has been stagnant through most of the year, with just $422 million added in the third quarter. 

Futures open interest (OI), including perpetual futures (perps), increased 41.46% QoQ from $132.75 billion to $187.79 billion on Sept. 30 before reaching an all-time high of $220.37 billion on Oct. 6.

The Oct. 10 liquidation cascade was the largest daily futures liquidation event in history, with long and short liquidations eclipsing more than $17 billion. Hyperliquid alone saw $10.08 billion in liquidations for the 24 hours. Bybit and Binance followed, reporting $4.58 billion and $2.31 billion, respectively.