Gradually but surely, the lending market is heating up once again, indicating a resurgence in borrowing and repayment activities on major lending platforms within the Ethereum ecosystem. While the current activity may not match the fervor of the DeFi summer, there has been a noticeable uptick in both borrowings and repayments.

On May 7, Aave, one of the leading decentralized lending platforms, witnessed a significant surge in net borrows, totaling $158.65 million. Net borrows represent the difference between the amount of loans taken out and the amount repaid on a given day. This surge marks the largest day of net borrows for Aave in over a year. Throughout the past 12 months, net borrows have generally remained subdued, with occasional spikes. However, the trend shifted since the end of February, with 36 days recording net borrows exceeding $20 million, a trend that was less common earlier in the year.

Aave's prominence in the lending resurgence is evident, outpacing competitors like Compound, which has seen relatively muted activity in either direction. Aave's dominance in Ethereum lending has strengthened, particularly since the launch of its v3 protocol at the beginning of last year.

Despite fluctuations, the number of unique borrowers on Ethereum lending protocols has increased over the past year, reaching its peak in February. Notably, the number of addresses borrowing from Aave per day in May has more than doubled compared to May 2023, indicating a growing interest in decentralized lending solutions.

While DEX volumes on Ethereum have experienced a recent uptick, they remain below their peaks from late 2021, reflecting a similar trend observed in lending. This may be partly attributed to the growing popularity of DEXs on alternative networks such as Solana and Binance Smart Chain.

Furthermore, lending activities on other blockchain networks have also gained traction, contributing to the relatively lower lending volumes on Ethereum compared to previous years. Platforms like JustLend on Tron have surpassed Compound in terms of total value locked, highlighting the diversification of lending across multiple networks.

In response to this evolving landscape, both Aave and Compound have expanded their offerings to other blockchain networks, adapting to the changing preferences and demands of the decentralized finance ecosystem. As lending activities continue to evolve, Ethereum's position as a leading hub for decentralized finance remains resilient, albeit amid growing competition from alternative blockchain platforms.