Best Lending Protocols on Stellar (2026): Compared

Stellar lending protocols at a glance

Ordered by Stellar TVL on DefiLlama, 6 October 2026. Alula is listed after the three larger venues because it launched in late September; the remaining venues each hold under $50K.

Protocol	Type	Best for	Key mechanic
Blend V2	Isolated pools	Supplying USDC, borrowing against XLM	Per-pool backstop takes first loss
Templar	Cross-chain lending	Borrowing USDC against XLM or tokenised credit	NEAR MPC and Chain Signatures, no bridging
XOXNO Lending	Hub-and-spoke money market	LP and RWA collateral, looping	Isolated "spokes", NFT accounts, flash loans
Alula	Segregated RWA pools	Institutional RWA credit	Cross-pool collateral, insurance fund
Peridot, K2 Lend and others	Various	Small, experimental positions	Under $50K each

Stellar lending by the numbers (October 2026)

All figures are from DefiLlama on 6 October 2026. TVL here means assets supplied minus assets borrowed.

Protocol	Stellar TVL	Borrowed on Stellar	Largest holdings
Blend Pools V2	$162.8M	$43.8M	XLM $151.1M, USDC $11.5M
Templar Protocol	$13.3M	$12.3M	XLM $7.4M, deJAAA $3.8M, USDC $2.1M
XOXNO Lending	$131K	$48K	XLM $72K, USDT0 $28K, EURC $24K
Peridot	$31K	under $1K	n/a
K2 Lend	$2K	$0	n/a
Alula	under $1K	under $1K	n/a

Together that is roughly $176M, against total Stellar DeFi TVL of about $265M. Two things stand out. First, Blend's book is lopsided: $151M of XLM sits there mostly as collateral, while USDC is the asset people borrow ($43.5M of the $43.8M). Second, Templar's USDC borrowing on Stellar is almost as large as its Stellar deposits, because its borrowers can post collateral on other chains.

How to choose

• You want to supply USDC and earn interest: Blend has the depth. Its Fixed pool paid 6.69% on USDC on 6 October (DefiLlama). See where to earn yield on USDC on Stellar for the other routes.
• You want to borrow USDC against XLM: Blend and Templar both do this. Compare collateral factors and the borrow rate on the day.
• You want to borrow against an Aquarius LP token: XOXNO is the only venue listing them, with small caps. See Aquarius LP tokens as collateral.
• You hold tokenised Treasuries or credit: Templar and XOXNO both list RWAs; check how each prices them before depositing. Our guide to RWAs as DeFi collateral covers what to look for.
• You want to loop or lever in one transaction: look for flash loans or a built-in multiply feature (Blend V2, XOXNO, Alula).

Blend V2 — Stellar's default lending layer

Blend is a lending primitive built by Script3: anyone can deploy an isolated pool with its own assets, oracle and risk settings, and each pool has a backstop of BLND-USDC liquidity that takes first loss on bad debt. With about $162.8M of TVL it dominates Stellar lending.

Most activity sits in one pool. DefiLlama's yield data shows the Fixed pool holding XLM, USDC and EURC, paying 6.69% on supplied USDC on 6 October (30-day average 7.56%), against roughly 0% on XLM, which almost nobody borrows. The community-run YieldBlox pool is now a fraction of its former size, with about $136K of XLM. Smaller pools list CETES, TESOURO, USDGLO, AQUA, PYUSD and SolvBTC, each holding under $10K.

Blend V2 includes a flash_loan function, but it works differently from the fee-based flash loans common on EVM chains: the borrowed amount becomes a position for the caller, and the pool checks that position's health at the end of the transaction. The contracts are open source under AGPL-3.0, and the repository includes a Code4rena audit report and Certora security and formal-verification reports.

Risks. In February 2026 an attacker manipulated the thin market that priced USTRY collateral in the YieldBlox pool and borrowed about $10M against it. In August the Comet pool that holds Blend's backstop deposits was exploited for about $717K, and Blend paused its backstop. Neither was a flaw in the pool contracts, but both show where the risk actually sits: pool configuration and the backstop. Details are in Blend's 2026 incidents; the mechanics are in what is Blend.

Templar — borrowing USDC across chains

Templar is a cross-chain lending protocol that lets Stellar users deposit assets such as XLM straight from their wallets and borrow USDC, without wrapped tokens or bridges. It relies on NEAR's multi-party computation network and Chain Signatures to handle deposits across chains.

Templar announced its Stellar launch in November 2025. On 6 October DefiLlama showed $13.3M of Templar deposits on Stellar, made up of XLM ($7.4M), Centrifuge's deJAAA ($3.8M) and USDC ($2.1M), with $12.3M of USDC borrowed on Stellar. According to RedStone, which supplies its SEP-40 price feeds, Templar accepts deJAAA, deJTRSY, CETES and USTRY as RWA collateral. Templar has said it plans to add Franklin Templeton's Benji fund; see Benji on Stellar.

Risks. The design adds a dependency that Stellar-native lenders do not have: the NEAR MPC network that signs for deposits. RWA collateral is priced by oracle rather than by a deep on-chain market, which is exactly the area where the YieldBlox exploit happened. We could not find published loan-to-value settings for Templar's Stellar markets, so check them in the app.

XOXNO Lending — spokes, LP collateral and flash loans

XOXNO Lending is a Soroban money market from the team behind the XOXNO platform on MultiversX. One central pool holds tokens, while isolated "spokes" decide which assets an account can use and at what loan-to-value. It is the first Stellar venue to list Aquarius LP tokens as collateral.

Its mainnet configuration defines three hubs (Core, RWA, AMM), nine spokes and 31 markets. Blue-chip assets borrow at up to 75–76% LTV, stablecoins at up to 88% in a dedicated "Stables & FX" spoke, RWAs at 60–80%, and Aquarius LPs at 50%. Cash flash loans carry a 9 basis-point fee, and a multiply function builds looped long or short positions in one call. XOXNO received a $135K Build award in SCF #43. Every account is an NFT, so the whole position, debt included, can be transferred.

Risks. It is very young and very small: $131K of Stellar TVL, tracked by DefiLlama only since 2 September 2026. The code is published under the PolyForm Noncommercial licence, and its security policy says audit material will be linked "when available". The full walk-through, including oracle design and governance delays, is in XOXNO Lending on Stellar explained.

Alula — segregated pools for RWA credit

Alula describes itself as an on-chain credit layer for real-world assets: configurable, segregated lending pools in which originators fund RWA-backed credit, with per-pool risk controls, flash-loan leverage and cross-pool collateral. It is live but tiny, with TVL that rounds to zero on DefiLlama.

Alula's open-source repository (AGPL-3.0) describes segregated pools with independent risk parameters, flash loans, leveraged "Multiply" positions built from flash loans and swaps, collateral in one pool backing borrowing in another, a dual-kink interest-rate model, oracle prices taken as the median of several SEP-40 feeds with circuit breakers, and an insurance fund for bad debt. The repository includes audit reports from Halborn and Highland Security (April 2026). DefiLlama began tracking it on 25 September 2026; its TVL has peaked at roughly $20K.

Risks. Cross-pool collateral is powerful and also the feature most likely to let a problem in one pool spread to another. With almost no deposits yet, there is no track record of liquidations under stress.

Peridot, K2 Lend and the long tail — small and early

Several other lending protocols run on Stellar, but none held more than about $31K on 6 October. They are worth knowing about, not yet worth relying on for size.

• Peridot is a cross-chain lending protocol with a hub-and-spoke design across BNB Chain, Monad and others. Its Stellar deployment held about $31K.
• K2 Lend lets users supply XLM, USDC, PYUSD or SolvBTC and borrow against them. It held about $2K, although DeFindex has written a supply-only K2 strategy for its vaults.
• Blend's original V1 pools still hold about $55K, and Slender is tracked by DefiLlama at zero.

How these fit together

Stellar lending now has three distinct shapes. Blend is permissionless pool infrastructure: deep, battle-tested, and as safe as the configuration of the pool you choose. Templar imports collateral and borrowers from other chains, so its Stellar book is driven partly by demand elsewhere. XOXNO and Alula bring the risk-segmented designs familiar from Aave's e-mode and isolated markets, with LP and RWA collateral that Blend's large pools do not list.

They also connect. XOXNO's code includes a migrate_from_blend function for moving positions across, and vault aggregators such as DeFindex route deposits into Blend and K2. A failure at a lending venue can therefore reach people who never used it directly. For the general mechanics of pooled versus isolated lending, see DeFi lending platforms compared.

The takeaway

For size and liquidity, Blend remains the venue. For LP or RWA collateral, the newer protocols offer things Blend's main pools do not, but at a scale where one large depositor is most of the market. Whichever you use, read the collateral list and the oracle behind each asset before the APY.

Sources: DefiLlama protocol and yield APIs (6 October 2026); XOXNO rs-lending-xlm mainnet configuration; blend-capital/blend-contracts-v2; pointgroup-labs/alula; RedStone; Templar; Stellar Community Fund. Parameters can change through each protocol's governance.