DeFi lending has been in a steady leverage drawdown since January. After declining for five consecutive months, active loans across the largest lending protocols climbed from $20.7B to $22.2B in July. The breakdown is intriguing: > First monthly loan growth of 2026 > +7.2% MoM > Aave remains the largest lending market > Aave and Morpho now account for almost two-thirds of outstanding loans Borrowing tends to recover when capital becomes more comfortable taking on risk again. It’s still too early to call this a trend reversal. But if loan growth continues over the coming months, it would suggest capital is becoming more willing to deploy leverage instead of sitting on the sidelines.
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