Interconnections between centralized and decentralized crypto loans increase the systemic risk, said the Galaxy Digital research arm in a report of 4 June on First quarter of loan data.
The report estimated that from March 31, more than $ 39 billion in crypto-collaterized debts was outstanding about decentralized loans apps, centralized lenders and stabilecoin-em posting supported by crypto.
Defi protocols accounted for 45.3%of the total, centralized locations accounted for 34.6%and collandable accounted for 20.1%.
According to the report, many centralized agencies increase liquidity on Defi rails in the short term and then borrow the Funds Off-Chain.
This duplication ensures that the same debt obligation appears in both on-chain data and private wholesal books, artificially inflating the crane figures and complicating real-time risk assessments during market stress.
Cross-venue Liquidations
Competitive price decreases often cause automated liquidations on Defi platforms first, because smart contracts force the margin rules without delay.
Centralized agencies borrowed from Defi can then respond by calling out loans or liquidating the collateral of customers at trade fairs, so that prices are further printed.
This forced sales supply to the market, deepen volatility and cause extra liquidations on chains, especially for assets such as such as such as such as such as Bitcoin (BTC), Ethereum (ETH) and stateed Eth (Steth) that are used on a large scale in locations.
Pendle tokens showed this reflexivity during the second quarter. After Aave High Loan-to-Value Collateral made possible, users poured nearly $ 1.4 billion and borrowed Stablecoins, which drove the total Defi offer in more than 26 May.
If prices fall, massive liquidations can go back to centralized agencies with mirrored exposures.
Debt -funded treasure chest
In the meantime, business treasury has added a different credit layer to the system.
The report identified at least $ 12.7 billion in convertible and zero collouponnosions issued by listed companies to finance crypto companies. The list of companies contains strategy, rioters and twenty -one capital.
Strategy alone owes $ 8.2 billion and pays $ 17.5 million in quarterly interest. Most comments are adults between mid -2027 and the end of 2028, creating a refinancing of bump that coincides with debts supported by peers who pursue a similar treasury policy.
In order to manage obligations in the short term, many companies trust OTC-Stabile Loans, usually 2% to 4% above the prevailing Defi rates. The narrow spread indicates that centralized agencies are actively benchmarking against Defi, so that private credit costs are linked to circumstances in the chain.
When Defi -rates shift, the OTC lending costs adjust quickly, so that the margin requirements are tightened for the borrowers of the Treasury and other participants.
Galaxy concluded that although the diversification of credit channels has increased the loan capacity, it has also strengthened the transfer of shocks in the system.
In the absence of standardized disclosures or on-changing for expansions at entity level, both supervisors and market participants in the dark remain in the full scope of risks in crypto-credit markets.