The DeFi ecosystem is beginning to reflect the increase in confidence in cryptocurrencies by recovering the $100 billion mark in Total Value Locked (TVL) within its protocols.
A strong recovery is taking place in DeFi as the ecosystem has managed to recover a significant milestone: Reaching $100.000 billion in Total Value Locked (TVL) again for the first time since May 2022.
This achievement reflects the continued growth and evolution of the sector. But not only that, it also reflects how the latest advances in terms of regulation, trust and development in the ecosystem have undoubtedly translated into a greater appreciation of the different projects, thereby attracting new capital and investors interested in this type of solutions.
All of this, of course, without forgetting the most recent rally in cryptocurrency prices. Especially when Bitcoin has reached a new ATH, with Ethereum gaining traction within the ecosystem and the rest of the altcoins are marking bullish rhythms.
Reasons behind the recovery of TVL in DeFi
Of course, the rise in TVL and recovery in DeFi can be attributed to several factors. The first factor is undoubtedly, the increase in the prices of cryptocurrencies, such as Bitcoin or EthereumThis recent surge in cryptocurrency prices has undoubtedly contributed significantly to the rise in TVL in DeFi. As the value of cryptocurrencies increases, the total value locked in protocols also tends to increase.
Another factor is The increased use and interest in resttaking platforms. Let's remember that resttaking involves re-locking cryptocurrencies (usually reward tokens) to obtain additional rewards. This practice has attracted great interest from DeFi users who continue to look for ways to maximize their returns, with resttaking being a great option for this. In this case, EigenLayer is being a complete boom for the ecosystem.
Finally, the growing interest in real-world assets (RWAs) has also driven the appreciation in DeFi. After all, the ability to use real-world assets as collateral in DeFi protocols has attracted more participants to the ecosystem, especially institutional participants who are starting to develop business lines using this technology.
Featured DeFi Sectors
According to DeFillama, the DeFi sectors that have played a crucial role in DeFi returning to the $100.000 billion TVL mark are:
- Liquid Staking. These are platforms that offer staking services and have managed to reach the sum of $54,9 billion in TVL.
- Lending. In this case, we are talking about lending protocols, which have seen a significant increase in TVL, as users seek to earn attractive returns by lending their assets or taking out collateralized loans. In total, this sector has managed to reach $32,34 billion in TVL.
- Bridge. Better known as chain bridges, they have managed to amass a total of 20,56 billion dollars.
- DEXs. In this case, DEXs or decentralized exchanges show a little more muscle by reaching $19,125 billion in TVL.
- CDP. These are projects that facilitate the tokenization and use of real-world assets in the DeFi ecosystem have attracted considerable value lock-in as investors look to diversify their portfolios with tangible assets. We are talking about projects such as MakerDAO or JustStables (tokenizing the US dollar in their own way) and of course new platforms dedicated to RWA. In total, this sector has managed to reach a total of 11,92 billion dollars.
- Resttaking platforms. These are the newcomers to the sector, in fact, there are only two protocols that offer this type of solutions and they have already raised 10,4 billion dollars. A TVL in which 99% of it is concentrated in EigenLayer, the star of resttaking solutions.
TVL and its constant evolution
The above makes it very clear that we are facing a recovery in DeFi, along with a constant evolution of the TVL. Especially in the face of the crashes suffered in 2021 and 2022, when the ecosystem was hit by the events of Terra Luna, AAVE, LIDO, Curve and FTX. Despite this, the recovery is not yet complete, and there is still a long way to go to reach that maximum TVL reached over 180 billion dollars. Despite everything, the ecosystem is giving good signs, especially that many of these events have been healed and that the crypto industry is not only regaining strength, but also the confidence of its different parts.
In short, the recent surge in DeFi TVL beyond $100.000 billion is a significant milestone that reflects the continued growth and evolution of the decentralized finance ecosystem. With increased interest in resttaking, tokenization of real-world assets, and rising cryptocurrency prices, the future of DeFi looks bright, with an ever-increasing impact on the global financial landscape.
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