Despite a major security breach in 2023, Euler lending protocol successfully regained users' trust. The project’s TVL grew by over 5x in the first few months of 2025 and shows no signs of slowing down anytime soon.

3Jane, a new entrant in the decentralized lending market, challenges the complexities of loans without collateral. The project aims to unlock a new credit creation mechanism in DeFi and tap into the $5.3 trillion global unsecured credit market.

Compound DAO greenlighted Morpho-powered lending vaults on Polygon, proposed by its major delegate. The decision has sparked debate—some see it as a strategic move to revitalize the stagnant protocol, while others view it as a shift away from Compound in favor of its competitor, Morpho.

Additionally, the project is significantly altering its security model, reducing risks for AAVE token holders, and improving capital efficiency of the protocol.

Morpho’s custom lending markets are rapidly capturing significant market share in the DeFi lending space. Its growth has not been welcomed by its leading competitor, also decentralized, Aave lending protocol.

THORChain, a cross-chain decentralized exchange, faced solvency issues caused by its DeFi services. Imbalances between deposits of bitcoin and other assets created a net short position for the protocol that worsened in the bull market. The protocol had to issue rescue tokens to cover the gap

The project's DeFi suite is quickly gaining popularity among users, with its capital-efficient lending and trading protocols rapidly increasing in TVL and trading volume.

Aave’s growth is fueled by increased leverage demand and a surge in monthly active users. The protocol is also expanding its integration with Layer 2 networks and preparing to launch a major upgrade in mid-2025.