Galaxy's Q1 2026 crypto leverage report is wild — DeFi…
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Galaxy's Q1 2026 crypto leverage report is wild — DeFi just had its second straight quarter of contraction
Spent way too long reading the Galaxy Q1 leverage report https://www.galaxy.com/insights/research/crypto-lending-leverage-q1-2026 this weekend. Honestly worth it.
The big picture: crypto lending shrank again. Two nine-figure exploits (Drift, LayerZero/KelpDAO) basically lit Aave on fire — people pulling stables, yanking WETH, full panic spiral.
The surprising part: BTC, ETH and SOL all bled hard since October, but CeFi loan books held up better than DeFi. Wild flip from a year ago when everyone was writing CeFi's obituary.
Who actually grew: barely anyone. Maple, Coinbase, Nexo, Milo — all the smaller names. Tether even contracted for the first time since 2021, which I didn't expect. There's a story in here about who actually weathered Q1 well that the report doesn't fully unpack.
My takeaway: the "DeFi is eating CeFi" story took a real hit this quarter. Two years ago it was "why would anyone use a centralized lender." Now it's "maybe some of these guys actually knew what they were doing." Funny how fast the narrative flips when an exploit drains nine figures in a weekend.
Pulled some funds off Aave after the rsETH thing myself and haven't moved them back. Where's everyone else borrowing/lending these days? And for the people who stuck with DeFi — what changed about your risk management?
#cryptocurrency
source
Spent way too long reading the Galaxy Q1 leverage report https://www.galaxy.com/insights/research/crypto-lending-leverage-q1-2026 this weekend. Honestly worth it.
The big picture: crypto lending shrank again. Two nine-figure exploits (Drift, LayerZero/KelpDAO) basically lit Aave on fire — people pulling stables, yanking WETH, full panic spiral.
The surprising part: BTC, ETH and SOL all bled hard since October, but CeFi loan books held up better than DeFi. Wild flip from a year ago when everyone was writing CeFi's obituary.
Who actually grew: barely anyone. Maple, Coinbase, Nexo, Milo — all the smaller names. Tether even contracted for the first time since 2021, which I didn't expect. There's a story in here about who actually weathered Q1 well that the report doesn't fully unpack.
My takeaway: the "DeFi is eating CeFi" story took a real hit this quarter. Two years ago it was "why would anyone use a centralized lender." Now it's "maybe some of these guys actually knew what they were doing." Funny how fast the narrative flips when an exploit drains nine figures in a weekend.
Pulled some funds off Aave after the rsETH thing myself and haven't moved them back. Where's everyone else borrowing/lending these days? And for the people who stuck with DeFi — what changed about your risk management?
#cryptocurrency
source
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