Onchain lending is always at the center of DeFi with ~$90B locked, the largest vertical right now.
The architecture is splitting into very different paths, and the shift Iâm seeing is how money markets are fighting for the capital efficiency of onchain finance.
đWe started with pooled liquidity (Compound, Aave), but the sector now splinters into:
â isolated pools (Silo, Compound v3)
â modular vault frameworks (Morpho, Euler)
â unified liquidity layers (Fluid)
Each is a bet on how to solve the capital efficiency vs. risk tradeoff. [1/3]
Aaveâs E-Mode lets stETH/ETH lever up to 95% LTV. Fluid even pushes 97% with tick-based partial liquidations at just 0.1% penalty.
Spark lets you loop DAI Savings Rate exposure with Makerâs $6.5B reserve.
This is why looping and yield-on-collateral are now explicit design goals.
Now weâre seeing RWAs as the next big unlock.
Aave Horizon brings tokenized T-bills, Maker routes most revenues from bonds, Maple sits on ~$3B in real-world credit, and Coinbase pipes $1.3B of cbBTC into Morpho to back $700M USDC loans.
[2/3]
đNarratives to watch:
â Lending x Trading convergence â unified liquidity where borrowing, margin trading, and LPing blur into one
â Fixed-rate comeback â with rates staying high, protocols like Notional v3 could revive fixed credit
â RWA dominance â treasuries and bonds becoming the base layer of DeFi collateral
â Intent-based credit â programmable vaults, hooks, and automated hedging that make lending look less like CeFi margin and more like Lego-style finance
Money markets are merging with DEXs, pulling in RWAs, and embedding into wallets, exchanges, and apps.
So the fight isnât who has the most TVL anymore. Itâs who controls the liquidity fabric itself.
Iâm watching the protocols that solve fragmentation and onboard RWAs at scale.
[3/3]
17.04K
129
The content on this page is provided by third parties. Unless otherwise stated, OKX is not the author of the cited article(s) and does not claim any copyright in the materials. The content is provided for informational purposes only and does not represent the views of OKX. It is not intended to be an endorsement of any kind and should not be considered investment advice or a solicitation to buy or sell digital assets. To the extent generative AI is utilized to provide summaries or other information, such AI generated content may be inaccurate or inconsistent. Please read the linked article for more details and information. OKX is not responsible for content hosted on third party sites. Digital asset holdings, including stablecoins and NFTs, involve a high degree of risk and can fluctuate greatly. You should carefully consider whether trading or holding digital assets is suitable for you in light of your financial condition.