Stablecoin deposits in DeFi reach $24 billion, up 560.8% in three years

On October 25, 2026, stablecoin deposits in decentralized finance (DeFi) protocols reached $24 billion, according to data aggregated by several platforms. This 560.8% increase over three years reflects the growing appeal of yield strategies, while transaction fees on Bitcoin and Ethereum remain historically low, facilitating capital movements toward these ecosystems. Context Decentralized finance (DeFi) has experienced exponential growth since 2023, driven by the adoption of stablecoins – digital assets designed to maintain a stable value, generally pegged to the US dollar. These tokens, such as USDC or USDT, serve as a pivot in lending and borrowing protocols, where users can generate yields by depositing their funds into smart contracts. In October 2026, the stablecoin market is worth over $300 billion, but only a fraction (approximately 8%) is effectively locked in DeFi protocols. This dynamic is part of an environment of particularly low transaction fees: 0.141 sat/vB on Bitcoin and 0.0439 gwei on Ethereum, according to CryptoScore Pro data as of October 25. These conditions favor arbitrage and capital transfers toward high-yield strategies, such as yield farming or liquidity mining . However, the concentration of deposits in a few stablecoins, notably USDC, exposes the market to counterparty and regulatory risks, in a context where European and American authorities are strengthening their surveillance. The Facts According to data published by DiarioBitcoin on October 25, 2026, stablecoin deposits in DeFi protocols reached $24 billion, up 560.8% over three years. This estimate, based on sources such as Token Terminal and DeFiStar.io, however shows variations: DeFiStar.io mentions a total of $25.75 billion, highlighting methodological differences between platforms. The main stablecoins involved are: USDC , which represents 38.2% of deposits (approximately 9.2 billion dollars), confirming its dominance in the DeFi ecosystem. USDT , with 20.3% of deposits (4.9 billion dollars), in second place. USDe , which occupies third place with 9% of deposits (2.2 billion dollars). Together, these three assets concentrate nearly two-thirds of deposits, illustrating a strong market concentration. The most active protocols include Aave V3, Morpho, Sky Protocol, and Spark, where users deposit their stablecoins in exchange for yields generated by interest paid by borrowers. Despite this growth, data reveals net withdrawals of 99.8 million dollars over the last month, according to DeFiStar.io. This negative flow, although marginal compared to the total volume, contrasts with the bullish trend of the last three years. The reasons for these withdrawals are not specified in the available sources. Furthermore, some yield strategies show spectacular annual percentage yields (APY), such as the morpho-blue/1337USDC protocol, which offers an APY of 29,799.5% with a total value locked (TVL) of 11.4 million dollars on Ethereum. These yields, often fueled by temporary incentives (such as governance tokens), raise questions about their sustainability. Understanding Key Concepts Stablecoin A stablecoin is a digital asset designed to maintain a stable value, generally pegged to a fiat currency such as the US dollar. Unlike volatile cryptocurrencies like Bitcoin, stablecoins aim to provide a predictable store of value, facilitating transactions and exchanges. For example, USDC is issued by Circle and backed by dollar reserves held in regulated institutions. In DeFi, stablecoins serve as liquidity for lending, borrowing, or yield strategies, while limiting exposure to market fluctuations. Total Value Locked (TVL) The Total Value Locked (TVL) measures the total value of assets deposited in a DeFi protocol, expressed in dollars. This indicator reflects user adoption and trust in a platform. For example, a TVL of 11.4 million dollars for a strategy such as morpho-blue/1337USDC means that users have locked this amount in the smart contract to generate yields. TVL is often used as a barometer of a protocol's health, although it does not guarantee its profitability or security. Annual Percentage Yield (APY) The Annual Percentage Yield (APY) represents the effective annual return on an investment, taking into account the compounding of interest. In DeFi, APYs can reach very high levels (such as 29,799.5% in the cited example), often thanks to temporary incentive mechanisms or capital optimization strategies. However, these returns are not guaranteed and can vary depending on market conditions, transaction fees, or technical risks (such as smart contract bugs). Decentralized Finance (DeFi) Decentralized Finance (DeFi) refers to a set of financial services operating without a centralized intermediary, such as banks or brokers. These services rely on smart contracts – autonomous programs executed on a blockchain – to offer loans, borrowing, exchanges, or yield strategies. For example, a user can deposit stablecoins into a protocol like Aave to lend their funds to other users in exchange for interest. DeFi offers increased accessibility and reduced fees, but also exposes users to specific technical and financial risks, such as hacks or stablecoin de-pegging. Analysis: what is at stake The main mechanism at work is a yield arbitrage: stablecoin holders, tokens intended to be worth one dollar, are choosing no longer to hold them as simple liquidity but to deposit them into lending protocols, where borrowers pay interest. According to Token Terminal data cited by the source, these deposits reached 24,000 million dollars as of October 25, 2026, an increase of 560.8% over three years. For depositors, the yield depends on borrowing demand; for protocols, this capital constitutes the raw material of their credit markets. For the asset itself, concentration is a central point. USDC would represent 38.2% of deposits, or approximately 9,200 million dollars, ahead of USDT at 20.3%. This position strengthens the liquidity and visibility of…