The surge in outstanding loans extends an expansion that began in early April when lending markets regained momentum alongside broader crypto prices.
At $23.723 billion, active loans now exceed the previous cycle peak set in December 2021 by roughly $3 billion. It highlights the growing role of permissionless credit in crypto-native trading, leveraged staking, and basis-trade strategies.
DefiLlama’s global dashboard shows DeFi TVL at $180.4 billion as of May 22, just 6.4% below the $192.8 billion TVL registered on Jan. 31.
This benchmark is important because it occurred one day before the White House confirmed an executive order activating new import tariffs, which are currently on a 90-day hold.
The rising loan balances suggest a greater demand for leverage among sophisticated traders. Many borrow stablecoins to finance directional BTC and ETH positions or capture basis and liquidity-mining yields.
However, the collateral for those loans is the net result of borrowings in standard TVL calculations.
Consequently, a simultaneous increase in borrowing and collateral withdrawals can leave overall TVL flat or even lower while credit activity accelerates. This reiterates the scenario of on-chain leverage using lending protocols.
This draws stablecoin deposits away from passive reserves and into lending pools. Higher utilization pushes loan balances upward but exerts only a muted effect on TVL because stablecoins generally enter protocols at a one-to-one dollar ratio.
The record $23.723 billion in active loans and the TVL’s 6.4% shortfall highlight a market where credit demand is accelerating even as aggregate collateral remains slightly below its late-January peak.
