DeFi Lending Protocols TVL Growth Hits 72% in August as the decentralized finance market expanded 9% overall. The surge was fueled by rising stablecoin demand and clearer regulations, which encouraged stronger institutional participation.

DeFi Rises 9% Amid Stablecoin All-time High

The DeFi ecosystem surged 9% in August, backed by a monthly boost in stablecoin activity, a September report from Binance Research showed.

The uprise resulted from favorable regulatory tailwinds, particularly with the recent signing of the GENIUS Act in the US, which regulates stablecoins and their issuers. The US SEC’s decision to exempt liquid staking tokens from securities classification also helped lift sentiment across the sector, according to the report.

As a result, the stablecoin market reached a new all-time high in August, rising 5.11% to $278 billion, marking the twenty-third consecutive month of growth in its value. The sector also saw a 6.49% expansion in supply in the past month, reinforcing on-chain momentum.

Ethena Leads Stablecoin Growth

Ethena’s USDe stablecoin surged 43.5% in August, reaching a supply of $12.2 billion and lifting its market share above 4%, according to the report. The milestone makes USDe the third stablecoin to surpass $10 billion in supply, reaching the mark in just 536 days.

In comparison, USDC took 903 days to reach the same level, while USDT needed more than 2,000 days to do so. Beyond the two incumbents, USDe now captures the bulk of new on-chain dollar inflows, underscoring its rapid ascent in the stablecoin market.

DeFi Lending Soars Year-to-date as Tokenization Trend Intensifies

DeFi lending protocols have seen a sharp rise in 2025, with total value locked (TVL) surging by $53 billion to $127 billion. The 72% increase is largely fueled by institutional adoption of stablecoins for loans and the growing use of tokenized real-world assets (RWAs).

Notably, Euler led the charge with a staggering 1,466% rise in value, followed by Maple Finance, which recorded a 586% increase.

Binance Research analysts noted that as tokenized assets gain wider acceptance, DeFi lending stands to benefit by bridging traditional financial markets and crypto-based systems. The integration could embed blockchain-linked features such as transparency, efficiency, and ease of participation into mainstream finance. It could also improve liquidity across both ecosystems.

One example is Horizon, an institutional lending platform launched by Aave Labs. The product enables stablecoin loans collateralized by tokenized RWAs, offering institutional players a new gateway to liquidity in decentralized markets.

As a result, Aave has extended its lead in the sector, representing roughly 54% of the TVL among lending protocols, or about $68 billion, according to Binance Research.

Institutional interest in real-world assets (RWAs) is concentrated in tokenized private credits and US Treasury bonds. Data from RWA.xyz reveals that tokenized Treasuries, both yield-bearing and non-yield-bearing, are valued at $7.4 billion, while tokenized private credit stands at $16 billion. Together, these two categories account for over 70% of the $28 billion RWA market.

Conclusion

The rise in DeFi activity reveals growing demand among larger investors, particularly with stablecoins and tokenized RWAs. As regulations surrounding crypto continue to shift towards a positive stance, expectations concerning the growth of these two sectors have skyrocketed.