DeFi borrowers unwound $7.79bn of the $11.33bn drop in crypto lending

The two dollar figures in Galaxy's report do not produce the percentage printed next to them. A peak of $78.69 billion in Q3 2025 falling to $56.16 billion at the end of Q2 2026 is a decline of $22.53 billion ^[1], which is 28.63% of the peak ^[2], against the 40.13% the report states ^[2]. Run it the other way: 40.13% off $78.69 billion leaves $47.11 billion, and for $56.16 billion to sit 40.13% below peak the peak would have to be about $93.8 billion ^[3].

The quarterly sequence agrees with the dollars. Galaxy's three consecutive declines run roughly 10%, then 5%, then 16.78% ^[4][3], and compounding those leaves a book at about 71% of where it started, a fall near 29% ^[4].

Inside the quarter, on-chain borrowers did most of the paying down. DeFi at $20.43 billion after a 27.61% fall implies $28.22 billion three months earlier, so $7.79 billion left ^[5][7]. CeFi's $22.98 billion after a 9.62% fall implies $25.43 billion, a decline of $2.45 billion ^[6][8]. That makes DeFi about 69% of the $11.33 billion total ^[7]. The two segments sum to $43.41 billion, 77% of the reported book, and the write-up does not break out the remaining $12.75 billion ^[8].

Galaxy Research characterized the environment as orderly and said lending markets maintained stability through September 2026 ^[6]. Crypto Briefing wrote that lending rates stayed stable instead of spiking on liquidity crunches and that no major platform failed ^[11]. The 2022 comparison sets a low bar: one quarter then erased more than 55% of outstanding loans and brought down major lenders ^[5], with collateral rehypothecated across multiple platforms and nobody holding a clean picture of total exposure ^[13].

The figures do not add up to a verdict on credit standards. The fastest leverage went first, because DeFi loans can be unwound instantly without negotiation ^[14], and exit speed is not evidence that lenders repriced terms. Galaxy's report also points to new onchain credit products emerging alongside the contraction ^[12]. If DeFi balances rebuild from $20.43 billion in Q3 while CeFi grinds lower, this was risk appetite rotating and it comes back; if both keep falling while Galaxy, Coinbase and Ledn add volume as they did in Q2 ^[10], the book is consolidating into fewer lenders. In my view the second is the better bet, on the evidence that CeFi shed only $2.45 billion in the steepest quarter of the cycle ^[6][3].