If you've been keeping an eye on the crypto space, you've probably noticed how decentralized finance (DeFi) is evolving at breakneck speed. A recent tweet from Token Terminal highlights a fascinating milestone: about $40 billion is currently borrowed from onchain lending platforms. And here's the kicker—all these platforms are built by crypto-native startups, not the traditional finance (TradFi) giants. We're still in the early innings of this revolution, but the numbers are already impressive.

Breaking Down the Chart: Top Players in Onchain Lending

The chart shared by Token Terminal paints a clear picture of the lending landscape. It shows active loans grouped by project, with a stacked area graph illustrating growth over time from 2020 to 2025. The total active loans sit at around $42.6 billion, with a fully diluted market cap of $12.4 billion for these protocols.

Leading the pack is Aave, commanding a whopping $28.1 billion in active loans. Aave is a decentralized lending protocol that lets users lend and borrow crypto assets without intermediaries, earning interest on deposits or using collateral to borrow. Right behind it is Morpho at $3.4 billion, which optimizes lending rates through peer-to-peer matching. Other notable mentions include Spark ($3.3B), Kamino ($1.7B), Euler ($1.4B), Fluid ($1.4B), MetaMorpho ($1.3B), Venus ($1.1B), and Moonwell ($0.8B), among others.

What's striking is the rapid growth spike in recent years, especially post-2023. This surge reflects increasing adoption of DeFi tools, where users can leverage their holdings for more opportunities—like trading volatile assets such as meme tokens.

Why Crypto-Native Startups Are Dominating

Unlike TradFi institutions, which are bogged down by regulations and legacy systems, crypto-native platforms are agile and innovative. They operate on blockchains like Ethereum, Solana, and others, offering permissionless access to anyone with an internet connection. This means no KYC hurdles or geographic restrictions, making them ideal for global users.

For instance, platforms like Aave allow over-collateralized loans, where you deposit more value than you borrow to mitigate risks. This setup has proven resilient, even during market downturns. The absence of TradFi players here underscores how blockchain tech is outpacing traditional models—think of it as startups disrupting banks, but on a decentralized scale.

Implications for Meme Token Enthusiasts

At Meme Insider, we're all about meme tokens, and this lending boom has direct ties to that world. Meme coins like Dogecoin or newer pumps often require leverage to amplify gains (or losses). Onchain lending lets traders borrow stablecoins against their meme holdings, freeing up capital for more plays. With $40 billion in liquidity flowing, it's easier than ever to get involved without selling your favorite memes.

However, remember the risks: liquidation can happen if collateral values drop sharply, a common scenario in the volatile meme market. Tools like these platforms' dashboards help monitor positions, but always DYOR (do your own research).

Looking Ahead: Still Early Days

As Token Terminal aptly puts it, we're "still early." With total value locked in DeFi climbing and innovations like real-world asset (RWA) tokenization on the horizon, onchain lending could explode further. Imagine borrowing against tokenized real estate or art to fund your next meme token investment—that's the future we're heading toward.

If you're new to this, start by exploring Aave or checking out Token Terminal's analytics for deeper insights. The crypto lending space is not just growing; it's reshaping finance, one block at a time. What's your take—ready to dive in?