The DeFi crypto lending protocols have seen their market shrink by approximately $45 billion since October.
Artemis data shows deposits on these platforms fell 36% to $79.6 billion from a peak of $125 billion in October.
Aave led the pullback in DeFi credit markets
According to the company, Aave led the decline with a decline of $27.6 billion. Spark followed with a decline of $5.4 billion, while Euler with $2.6 billion, Fluid with $2.4 billion and Compound with $2.0 billion rounded out the top five.
Together, these platforms were responsible for $40 billion of the total reduction.
Crypto loans are shrinking.
Since October, deposits through the major protocols have fallen from $125 billion to $79.6 billion, a decline of 36%.
Almost all of the decline comes from a handful of protocols:
• Aave: −$27.6 billion
• Spark: −$5.4 billion
• Euler: −$2.6 billion
• Liquid: −$2.4 billion
• Composite value: −$2.0 billion… pic.twitter.com/L22ZtezsBJ— Artemis (@artemis) March 14, 2026
Market observers linked the decline to a structural reset on the DeFi lending industry’s largest platforms. This was caused by the declining value of collateral and the forced reduction of leveraged positions.
“Misleading. The value of the collateral falls approximately in line with the decline in crypto prices $BTC /ETH. Stablecoin lending is still healthy,” said GC Cooke, founder of stablecoin management platform Brava.
Indeed, the broader crypto market had experienced a sharp decline from Bitcoin’s high of $126,000 in October 2025 to a low of less than $60,000 in early February 2026. $BTC has recovered to over $70,000 at the time of writing.
Due to these volatile market conditions, crypto analyst Tochi pointed out that “crypto lending is not shrinking, but crypto market capitalization is.”
According to the analyst, the total cryptocurrency market capitalization has fallen by 45%, from $4.38 trillion in October to $2.48 trillion.
That 45% decline partly explains why the total value on the credit markets also fell sharply. DeFi lending is measured in US dollars, while much of the underlying collateral consists of volatile digital assets.
As a result, a price drop of 30% to 50% can wipe out significant value, even if users are not actively withdrawing funds.
In fact, the industry’s dollar footprint is shrinking as collateral prices fall.
Apart from that, Aave, the largest lending platform, has also experienced direct capital flight, apart from the effect of lower token prices.
DefiLlama data shows that Aave’s initial Ethereum deposits fell from 14.5 million to 12.07 million tokens in early February.
Industry experts linked that decline to broader market conditions and to an ongoing dispute within the decentralized autonomous organization Aave.
This governance friction has recently prompted members of the crypto community to question the platform’s model and processes.
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