DeFi lending recovered to $26.1 billion in August from $20.1 billion in June, a roughly 30% increase, after several months of declining borrowing, utilization and protocol revenue. Aave led the market with $12.5 billion in outstanding loans, representing about 48% of the total, followed by Morpho at $5.1 billion and Spark at $2.1 billion. Aave’s active loans averaged about $10.3 billion in July before reaching $12.5 billion in August, while founder Stani Kulechov said total deposits exceeded $30 billion during the month, up 30% over the quarter. The rebound reflects renewed on-chain credit demand, including leveraged crypto trading, alongside improved market conditions, competitive yields, expanding layer-2 and cross-chain infrastructure, and growing institutional and real-world-asset applications. Higher activity can support protocol revenue but also increases exposure to smart-contract, oracle, volatility and regulatory risks.