21 April, 2024



DeFi Surges as Total Value Locked Nears 2021 Highs

28 Feb, 2024

06 Mar, 2024

  • The total Value Locked in DeFi surpasses $141.7 billion, marking a substantial recovery from 2022 lows.
  • DeFi growth is driven by liquid staking, with Lido Finance leading with $33 billion locked.
  • DappRadar reports a January DeFi TVL jump to $110 billion, reflecting a strong market resurgence.

The decentralized finance (DeFi) sector is experiencing a significant resurgence with the total value locked (TVL) surging past $137 billion. This marks a remarkable recovery from the lows witnessed during the 2022 bear market which had placed TVL within striking distance of its May 2021 peak. DeFi Llama, a leading DeFi data provider confirms the recent surge in the TVL within the DeFi ecosystem. As of today, the platform displays a TVL exceeding $141.7 billion.

Source: DefiLlama

Unlike the DEX-driven growth of 2021, the current surge is primarily fueled by liquid staking projects. These protocols allow users to earn staking rewards while retaining the flexibility to utilize their staked assets in other DeFi applications. Lido Finance a leading Ethereum liquid staking platform stands as the biggest DeFi protocol with nearly $33 billion locked.

The launch of Ethereum’s Shapella Upgrade in 2023 enabling withdrawals for staked ETH significantly boosted demand for liquid staking and Lido’s services. This coupled with the recent price increase of ETH has further propelled Lido’s TVL.

Furthermore an analysis from DappRadar reveals a remarkable DeFi TVL jump to $110 billion in January which is the highest TVL since 2022. This suggests a strong market resurgence and growing optimism among investors. 

Reststaking protocols like EigenLayer are another significant contributor to the DeFi growth narrative. These platforms allow users to leverage their staked ETH further and generate additional rewards through various applications. The promise of higher returns particularly in a low-reward environment for traditional staking attracts users to these innovative solutions.

DappRadar’s January report corroborates the optimistic outlook. While acknowledging market fluctuations the report emphasizes a promising start to 2024. The report noted that daily unique active wallets have reached a new high indicating a growing adoption rate of DeFi protocols. Additionally, social dapps have witnessed a significant increase underlining the growing interest among users in the DeFi ecosystem.

The positive outlook is further supported by an X post from the Satoshi Club which highlights Ethereum’s TVL reaching $51.3 billion. This is a significant milestone for the Ethereum network and the DeFi ecosystem as a whole.

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