Navigating the Lending Landscape

Introduction

Credit sits at the core of DeFi’s capital stack. Since 2023, lending has been in a secular uptrend, driving the broader DeFi renaissance and becoming the largest sector by deposits. As of August 12, 2025, money markets exceed $120B in deposits, while outstanding loans are approaching $50B, with both figures almost doubling their 2021 peak.

This report examines the competitive dynamics of the money market landscape, discussing the various design choices, growth levers per protocol, and winners. Notably, we limit our analysis to the top 8 money markets by active loans as of writing: Aave v3, Morpho, SparkLend, Kamino, Fluid, Euler v2, Maple, and Compound v3. Collectively, these protocols account for 85% of total borrows in DeFi.

Market Growth: Deposits and Loans

Deposits

Aave has been incredibly dominant in the lending vertical, extending its absolute lead in both deposits and active loans. The chart below shows that Aave v3 has surpassed $65B in deposits as of August 12, 2025, almost 100% higher than the combined $33B deposited across the following seven money markets.