For Crypto Holders, DeFi Lending Rates Are Now Lower Than A 30-Year Mortgage or Car Loan
Fintech may be hitting its stride, especially for those rich in cryptocurrency holdings. As it is, interest rates for collateralized loans on decentralized finance (DeFi) protocols like market leader Aave V4 (AAVE) are lower than current 30-year fixed mortgage rates and most auto loans.
The one saving grace for traditional finance is that most people don’t own cryptocurrencies, or know how to obtain a loan through a DeFi company. Singling out that segment of the blockchain market, DeFi lending applications held roughly 59% of the crypto-collateralized lending market by second quarter of 2025, up from 54% in the first quarter. Most of this taking away from crypto lending on centralized finance exchanges, opposed to the bank on Main Street.
This year, DeFi has surpassed centralized financed (CeFi) loans offered up on the blockchain. CeFi has imploded.
When new CeFi giants like Celsius and BlockFi failed in 2022, users fled to the decentralized players.
“DeFi won because everything is run by open, audited smart contracts, not by secretive CEOs,” said Jean Rausis, founder of DeFi protocol and automated market maker, SMARDEX. “This shift was massive, as total on-chain loans ballooned to $26.5 billion – a 42% quarterly rise – and that has completely overshadowed CeFi’s business.”
SmarDex is a decentralized DeFi platform, somewhat like Binance but without any central authority. It started as a DEX that fixed impermanent loss and has grown into a whole ecosystem offering a yield-generating synthetic dollar, peer-to-peer lending, and an AI financial assistant.
Defi “Powering the Real Economy”
What changed to make DeFi the go-to for this burgeoning online lending market?
“Transparency and programmatic risk controls have made it more attractive than CeFi, that’s for sure,” said Kai Tai Chang, co-founder and COO of Yala, a Singapore-based startup aiming to turn idle Bitcoin into yield-bearing collateral for online lending markets.
“Aave will be the backbone of all credit. Mortgages; credit card loans; consumer loans; business loans; sovereign debt. DeFi is powering the real economy.” — Stani Kulechov, founder and CEO of Aave, posted on X on Nov. 25, 2025.
In DeFi, collateral, borrow limits, and liquidations are visible on-chain and enforced …
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