Limited Asset Support Reduces Access

Most DeFi lending platforms only accept popular assets like ETH, BTC, or USDC, which means users with other valuable assets (such as tokenized collectibles) can't use them to borrow funds. This acts as a limitation for users who hold unique or comparatively less common or valuable assets.

In 2025, Uniswap LP tokens represent a significant portion of the liquidity within the Uniswap ecosystem. While precise figures fluctuate, Uniswap, with its V3 version, offers a high level of capital efficiency, allowing LPs to provide liquidity with up to 4000x more efficiency than V2. (Source: Uniswap)

However, the majority of lending protocols still don't allow these tokens as collateral. Due to this reason, it has become comparatively difficult for certain users to unlock the value of the tokens they already own.