DeFi lending rises 72% on institutional interest, RWA collateral adoption

Decentralized lending protocols are surging in total value, set to further 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 such as banks.

DeFi lending protocols rose over 72% year-to-date (YTD), from $53 billion at the beginning of 2025 to reach over $127 billion in cumulative total value locked (TVL) on Wednesday, according to Binance Research.

The explosive growth is attributed to DeFi lending protocols benefiting from the 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.

DeFi lending protocols, TVL, year-to-date chart. Source: Binance Research

A significant portion of this growth was attributed to Maple Finance and Euler, which saw an explosive 586% and 1466% rise, 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.

RWA global dashboard. Source: RWA.xyz

Tokenized financial products, such as private credit and US Treasury bonds, became a focal point of interest 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 Treasuries, according to data from RWA.xyz.

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Some RWA protocols enable the use of yield-bearing tokenized US Treasury products as collateral for multiple DeFi activities.

However, using US Treasuries 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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