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- 1 An amazing 128% increase from a year ago, blockchain-based lending is back in the game, touching $582 Million in Loans.
- 2 The token loans aren’t small either, recording major demands from fields of Consumer, and automotive sectors.
- 3 Centrifuge, Goldfinch, and Maple are some of the top blockchain credit protocols.
Data from RWA.xyz, a real-world asset loan tracker ensured the revival of blockchain-based lending. Loan-seekers showing trust for blockchain-based options to traditional financiers, amid rise in interest rates. As a result, the lending hit $582 Million, doubling from 2022.
Why are Blockchain-Based Private Loans Regaining Momentum?
Blockchain-based lending permits borrowers to maintain ownership of the assets along with gaining access to cash via loan. The digital assets are used as collateral. Centrifuge, Goldfinch, Maple, Clearpool, and Credix are some of the top Blockchain credit protocols.
Also, the facilities and services for these loans are offered using a few of the cryptocurrencies including USD Coin (USDC), tether (USDT), and Dai (DAI).
According to the data from RWA.xyz, loan-seekers are preferring blockchain-based options to traditional financiers. Regaining momentum in 2023, the value of active tokenized private credit hit $582 Million, an amazing rise of 128% from 2022.
A recent rise in interest rates emerged as one of the main reasons behind the regain.
Focusing on the current facts, the average Annual Percentage Rate (APR) arranged by blockchain credit protocols is 9.65%, whereas the financiers offer small business bank loan interest rates between 5.0% to 11.5%. The data was provided by NerdWallet on December 1, 2023.
A real-world asset loan tracker analyzed the data to conclude. Based on the analysis, the blockchain-based loans hit $4.5 Billion in 1,804 deals, showcasing an average loan of around $2.5 Million. Surprisingly! The loans aren’t small either.
Looking ahead to the United Kingdom market, firms like the Brazilian bank Divibank and Fasanara Capital are the main contributors to Blockchain-based lending growth. Fasanara Capital, an asset management firm took a loan of $38.3 million from Clearpool at 7% base APY.
In addition to this, Centrifuge holds 43% of the current active loans market, worth $255 million. Whereas, Goldfinch and Maple, hold $143 million and $103 million in active loans, respectively.
The Major Contributors
Loan-seekers are the major contributors, making it possible for blockchain-based lending to hit $582 Million in Loans. However, the Consumer and automotive sectors secured the top position in the list of major contributors.
The consumer sector spent $197.7 million on loans whereas the automotive sector used $186.8 million. Considering other major players, the Carbon project borrowed loans of $39.5 Million and Crypto Trading took a loan of $30.5 Million. Fintech contributed $105.2 Million whereas, Real Estate sector borrowed $40.0 Million from Blockchain credit protocols.
Although the field is growing gradually, the current position of the Blockchain-based loans market is lagging behind the traditional private credit market. The Blockchain-based loans market is around 0.3% of the traditional credit market and holds a size of $1.6 Trillion.
Steve Anderson is an Australian crypto enthusiast. He is a specialist in management and trading for over 5 years. Steve has worked as a crypto trader, he loves learning about decentralisation, understanding the true potential of the blockchain.