Blockchain-based personal loans reached $582 million, doubling from last year.

Blockchain-based lending is booming again this year, with the revenue token's personal credit value now sitting at $582 million — a staggering 128 percent increase from a year ago.

In the year A far cry from its June 2022 peak of $1.5 billion, according to data from real-world property loan tracker RWA.xyz, the resurgence could indicate a recent surge in borrowers seeking blockchain-based alternatives to traditional financiers. in interest rates.

The current average interest rate for blockchain-based credit protocols is 9.64%, while financiers have been offering small commercial bank loan interest rates between 5.75% and 11.91%, according to a Dec. 1 report by NerdWallet.

The loans being taken are also not small. RWA.xyz has tracked $4.5 billion in blockchain-based loans in 1,804 deals, which means the average loan is issued at $2.5 million.

One of the most prominent borrowers of late is UK-based asset management firm Fasana Capital, which took out a $38.3 million loan from Clearpool with a sub-7% APY.

Brazilian bank Divibank is another financial institution participating in the market.

Ethereum-based Centrifuge owns more than 43 percent of the credit market with current revenue of $255 million, up 203 percent from $84 million in early 2023.

Goldfinch and Maple are the second and third largest blockchain lending protocols with $143 million and $103 million in active loans, respectively.

The US dollar-pegged stablecoins Tether (USDT), USD Coin (USDC) and Dai (DAI) are three of the main cryptocurrencies used to facilitate these loans.

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The largest blockchain-based loan applicants come from the consumer ($197.7 million) and automotive ($186.8 million) sectors, followed by fintech, real estate, carbon credits and kriptovalyutnyh transactions, the data shows.

Despite recent increases, the $506 million active loan market is about 0.3 percent of the $1.6 trillion traditional personal loan market.

Borrowing from blockchain-based protocols, however, comes with risks. Borrowers must weigh bankruptcy, collateral, smart contracts and other security risks before taking out a loan.

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