DeFi lending rebounded by 7% in July, crypto activity heats up but stablecoin inflows lag

July crypto activity picks up, DeFi lending rallies 7%, but stablecoin inflows lag

July crypto activity shows new signs of recovery. Decentralized finance (DeFi) lending saw its first significant increase in 2026 after months of contraction. Despite improvements in activity indicators, new liquidity inflows into the sector remain limited. [TAG

DeFi lending and lock-in value rebound

Active loans on DeFi lending platforms rose 7.2 percent in July, from $20.7 billion to $22.2 billion, according to Cryptorank. The total value of locked positions in decentralized finance also increased, from US$68 billion at the beginning of the month to US$74.9 billion on July 31.

Aave, one of the largest DeFi lending agreements, continues to lead the segment with US$11 billion in active loans and maintains a 46.2% market share. Aave and Morpho together account for approximately two-thirds of all outstanding DeFi loans.

This recovery is partly due to positive price movements of major cryptocurrencies. Ethereum prices rose 20.32% in July, while Bitcoin rose 9.03% over the same period. Despite this, Bitcoin has maintained its dominant position over most alternative currencies.

DeFi lending activity grew for the first time in 2026, with active loans increasing by $1.5 billion in July, and key agreements such as Aave and Morpho further consolidating their positions.

Small Dictionary: Aave is a leading decentralized financial platform that enables unintermediated cryptocurrency lending on the Ethereum blockchain through smart contracts, where users can earn interest or obtain liquidity through mortgage loans.

The platform's active loans and market share are as follows: Aave has US$11 billion in active loans, accounting for 46.2%;Morpho did not specify the specific amount, but together with Aave accounts for the remaining two-thirds; other platforms account for the remaining share.

Liquidity inflows remain weak

Despite increased on-chain activity, broader crypto liquidity is under pressure due to insufficient inflows. In July, the total supply of stablecoins shrank 0.6% to approximately US$312 billion. Limited stablecoin minting and sluggish ETF inflows have limited the entry of new capital into the market.

Institutional capital inflows have also slowed compared to last year, not only for Bitcoin, but also leading assets such as Solana and Ethereum. Corporate treasury departments restrict investment, exacerbating the cautious atmosphere in the market.

Across the ecosystem, the focus has shifted to sustainable projects, with a wave of unsustainable entrepreneurial projects closing in 2026, and liquidity concentrated among the remaining head projects.

On-chain transactions and trends intensify

In July, transaction volume on decentralized exchanges (DEX) exceeded US$169 billion, achieving an increase of more than 10% in the last week of the month. According to DeFi Llama, trading volume of perpetual contracts also increased, with a weekly increase of 12%, and open interest contracts rising to more than $15 billion.

Robinhood, known for its brokerage platform, has also become a key player, running one of the most active chains in July, striving to gain a stronger position in the crypto space.

Despite the lack of new liquidity, market participants have adopted a more aggressive strategy. The circulation rate of stablecoins remained high, especially on networks such as Solana, Base and Ethereum, while the flow rate on Arbitrum and Optimism slowed. Among them, Solana maintained the highest circulation speed of stablecoin due to the promotion of meme tokens and tokenized securities transactions.

Some large companies known as "crypto whales" have turned to highly leveraged positions in the perpetual contract market and even expanded into stock markets, such as the S & P 500 and major technology stocks such as SK Hynix.

The latest surge in crypto activity does not mark a full return to risk appetite, with participants chasing short-term gains through leverage allocation in a cautious liquidity environment.