As the crypto lending market recovers from the shock of large defaults in the sector, the markets are now focused on institutional lending where capital efficiency and liquidity are key.
Overcollateralized lending has been stagnant although holding ground, but its low utilization, low interest rates and wide bid ask are not appealing to most lenders and borrowers.
The market preference is switching to non-collateralized lending where a mix of Cefi and Defi characteristics may evolve to provide the winning combination.
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