Sun, XiaotongStasinakis, CharalamposSermpinis, Georgios2026-09-022026-09-022026Sun, X., Stasinakis, C., & Sermpinis, G. (2026). Mega-whale driven decentralized lending protocols. Financial Innovation, 12. https://doi.org/10.1186/s40854-026-00956-32199-4730https://hdl.handle.net/10289/18609This study examines systemic risks in decentralized lending protocols stemming from “mega-whales”—large users with transaction volumes exceeding $100 million—who dominate liquidity dynamics. Using high-frequency transaction-level data from major protocols (Aave v2/v3, Compound v2/v3, Morpho Blue, Flux, and SparkLend) spanning August 2024 to August 2025, we identify 550 mega-whales and analyze their impacts across market size, structural risks, and user activity. Key findings reveal the following: (1) The net growth in both mega-whale deposits and borrowing is negatively correlated with the market-size dynamics of lending protocols, while arbitrage-driven behaviors (such as token diversification and platform switching) further fragment the growth of Total Value Locked (TVL); (2) Although whale borrowing serves to temporarily stabilize leverage ratios, deposit activities may adversely impact systemic stability; however, an increase in mega-whale deposits is found to positively stimulate the growth and participation of unique depositors; (3) Utilizing event-window controls around DeFi shocks, we confirm that these effects are strongly associated with mega-whale activities rather than market-wide events. These results point to participation patterns that may be inconsistent with DeFi’s egalitarian ethos, suggesting that economic concentration could influence market dynamics.enAttribution 4.0 Internationalhttp://creativecommons.org/licenses/by/4.0/lending protocolsmega-whale usersdecentralized financeJournal Article10.1186/s40854-026-00956-32199-47303502 Banking, Finance and Investment35 Commerce, Management, Tourism and Services3502 Banking, finance and investment