2023 has seen a resurgence of blockchain-based lending, with active tokenized private credit valued at $582 million, a startling 128% rise from the previous year.

Despite the fact that it is still far from its top of $1.5 billion in June 2022, the rebound may indicate that, in light of the recent increase in interest rates, borrowers are searching for blockchain-based substitutes for conventional lenders, according to data from real-world asset loan tracker RWA.xyz.

According to a Dec. 1 investigation by NerdWallet, lenders have been offering small business bank loan interest rates ranging from 5.75% to 11.91%, while the average percentage rate for blockchain-based credit procedures is currently 9.64%.

Nor are the loans being taken out negligible. Based on 1,804 deals, RWA.xyz has monitored $4.5 billion in blockchain-based loans; this implies that the average loan amount is approximately $2.5 million.

The asset management company Fasanara Capital, situated in the United Kingdom, is one of the most notable borrowers of late. It obtained a $38.3 million loan from Clearpool at a base annual percentage yield (APY) of less than 7%.

Another financial player in the market is Divibank, a Brazilian bank.

Centrifuge, an Ethereum-based company, has increased its stake in the active loan market from $84 million at the beginning of 2023 to $255 million, or over 43%.

With active loans totaling $143 million and $103 million, respectively, Goldfinch and Maple rank second and third among blockchain credit protocols.

Three major cryptocurrencies are used to enable these loans: USD Coin, Dai, and Tether, which are US dollar-pegged stablecoins.

The research indicates that the consumer ($197.7 million) and automotive ($186.8 million) sectors are the top sources of blockchain-based loan applicants, followed by fintech, real estate, carbon credit, and cryptocurrency trading.