Crypto lending vaults pass $10B in deposits as experts flag systemic risk

Deposits in crypto lending vaults have grown from $4 billion in early 2025 to over $10 billion, fueled by institutional investors and treasuries chasing high stablecoin yields. Experts are warning of systemic risks and calling for stricter risk management plus compensation buffers to cover security breaches or negligence. Traders should watch this corner of DeFi for contagion risk, since rapid leveraged growth in lending vaults can amplify losses if a protocol fails.