The data of RWAa tracker of asset-backed lending in the real world, testifying to a vibrant recovery in the blockchain lending sector.
Loan buyers are showing increasing confidence in blockchain-based alternatives compared to traditional lenders, especially in a context of rising interest rates.
As a result of this trend, the volume of loans has increased significantly, amounting to $582 million and a doubling compared to 2022. Let’s see all the details below.
An analysis of the blockchain lending boom
Blockchain-based lending offers borrowers the opportunity to retain ownership of their assets and access liquidity through a loan, using digital assets as collateral.
Being one of the most recognized blockchain credit protocols Centrifuge, Goldfinch, Maple, Clearpool and Credix.
Moreover, the facilities and services for such loans are provided through the use of some of the leading cryptocurrencies including USD Coin (USDC), tether (USDT) and Dai (DAI).
According to data provided by RWA, loan applicants are increasingly preferring blockchain-based options over traditional lenders.
In 2023, the total value of active tokenized private credit reached $582 million, a significant increase from $582 million. 128% compared to the previous year, an increase partly fueled by the current rise in interest rates.
Focusing on current figures, the average annual percentage rate (APR) organized by blockchain lending protocols is 9.65%, compared to bank interest rates for small businesses, which range from 5.0% to 11.5% according to data from NerdWallet collected on December 1, 2023.
A real-world asset lending tracker examined the data and concluded that, based on the analysis, blockchain-based lending has reached a total of $4.5 billion through 1,804 transactions, with an average of approximately $2.5 million per loan.
The main sectors responsible for the contributions of $582 million
Examining the UK market, it is clear that companies such as Brazilian bank Divibank and Fasanara Capital are contributing significantly to the growth of blockchain-based lending.
For example, Fasanara capitalan asset manager, received a $38.3 million loan from Clearpool with an annual interest rate of 7%.
Additionally, Centrifuge has 43% of the current active loan market, worth $255 million, while Goldfinch and Maple have $143 million and $103 million in active loans, respectively.
The main proponents of blockchain-based lending are loan seekers, bringing the total to $582 million. However, the consumer goods and automotive sectors have positioned themselves at the top as the main contributors.
The consumer sector invested $197.7 million in loans, while the automotive sector hired $186.8 million.
Among the other relevant participants are the Carbon project has secured funding of $39.5 million, while Crypto Trading has accessed a $30.5 million loan.
The fintech sector contributed $105.2 million, while the real estate sector lent $40.0 million through blockchain lending protocols.
Despite the gradual growth of the sector, the blockchain-based lending market currently lags behind the traditional private lending market.
The size of the blockchain-based credit market represents approximately 0.3% of the traditional credit market, worth $1.6 trillion.