USDC Loan Utilization Rate on Aave Protocol Falls to 20% from 80%

According to data from Delphi Digital, an Institutional grade crypto research firm, the crypto loan utilization rates for prominent collateral types like USDC on the crypto lending protocol, Aave, have declined significantly this year.

Delphi Digital published a year-to-date (YTD) graph yesterday illustrating how the utilization rates for the Ethereum USD (ETHUSD) pair and that of USDC fell continuously from over 80% in December 2021 to nearly below 20% in December 2022.

Utilization rates for prominent collateral types like $USDC on @AaveAave have declined significantly this year. pic.twitter.com/BcAu5zPTHO

— Delphi Digital (@Delphi_Digital) December 30, 2022

Notably, the utilization rate represents how much of a pool has been loaned out compared to available liquidity. For example, a pool with $1,000 of USDC where $800 of those USDC have been borrowed represents a utilization rate of 80%.

Unfortunately, multiple crypto lending platforms have gone bankrupt this year, with billions of customer funds yet to be recovered. Prominent among them are Celsius Network and BlockFi.

The international entrepreneurial magazine Fortune recently counted the top crypto projects that received some of the highest funding in 2022, highlighting how significant investors gradually cut their bets on the Web3 businesses as the crypto winter set in.

According to the study, global financing for crypto businesses decreased from $8.8 billion in the first quarter of 2022 to $6.2 billion in the second quarter to about $3.4 billion in the third quarter.

Similarly, the global crypto market ultimately broke below the $800 billion price point as prices continuously dropped. According to data from CoinMarketCap, the global crypto market cap is currently $794,130,022,820.

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