Galaxy Digital: The interdependence of CeFi, Decentralized Finance, and encryption assets exacerbates systemic risk

Gate News bot message, Galaxy Digital's research department pointed out in the first quarter lending data report that the interconnection between centralized and decentralized Crypto Assets lending is exacerbating systemic risk.

The report estimates that as of March 31, the total outstanding crypto asset collateral debt from decentralized lending applications, centralized lending institutions, and crypto asset-backed stablecoin issuers exceeds 39 billion dollars.

DeFi protocols account for 45.3% of the total, centralized platforms account for 34.6%, and collateralized stablecoins account for 20.1%.

The report notes that multiple centralized platforms attract short-term liquidity on DeFi tracks and then lend funds off-chain. This duplication results in the same debt obligation appearing in both on-chain data and private ledgers, artificially inflating aggregate borrowing data and complicating real-time risk assessment under market pressure.

Source: CryptoSlate