Decentralized finance (DeFi) has always been the most scalable sector in the web3 space. With new innovations and protocols emerging in the DeFi industry, the ecosystem’s Total Value Locked (TVL) continued to rise until the bear market kicked in.
The bear cycle has caused many slowdowns across many sectors of the We3 industry, including DeFi. However, following the so-called “mini bull run” underway, we have seen DeFi TVL start to recover from the lowest lows and rise almost 20% year-to-date.
DeFi TVL increases by nearly 20%
According to data from DeFiLlama, DeFi TVL surpassed $45 billion – its highest point in the past two months. Major DeFi protocols such as Lido Finance and MakerDAO played a role important role in rising DeFi TVL. Lido has amassed double-digit gains over the past week, adding $8.4 billion to the DeFi ecosystem since bottoming out late last year.
Although the rise in TVL seems to mirror the crypto rally, as most of the underlying DeFi tokens have also followed suit in the uptrend, one thing to note is that DeFi TVL is still very far from its all-time high seen in 2021. .
Notably, liquid staking protocol like Lido Finance is accelerating the rise of the DeFi ecosystem, holding the largest DeFi market share with 14.75% dominance and leaving the former king of DeFi, MakerDAO trails with a 13.25% share, according to DeFiLlama.
As reported by NewsBTC, the reason for the rapid increase in momentum of Lido is the Ethereum merger, which sparked the popularity of liquid staking protocols such as Lido Finance. Following the merger, ETH’s total stake in Lido increased by 10%, from 4.43 million ETH on September 15, 2022, the date of the merger, to over 4.8 million ETH today. today.
Another accelerator of the rise DeFi TVL
Besides Lido’s help in the DeFi TVL surge, high-speed layer-1 blockchain network Algorand has also been a helper after its 123% surge. peak over the past week. It currently has $176 million in TVL, with five of the network’s six major DeFi protocols having made significant winning percentages in the past 7 days.
AlgoFi is up 121% in the last 7 days. Folks Finance grew by 490%, Pact by 136% and GARD by 202%, giving the ecosystem a massive boost.
Both Aave and Uniswap have always contributed greatly to the DeFi TVL ecosystem, with Aave seeing over 10% gains in the last 7 days and Uniswap seeing almost 7% gains over the same period. When it comes to blockchain, Ethereum is still the top dog with the largest share in DeFi TVL.
Ethereum has a DeFi market share of over 50%, with a TVL of $27.16 billion. ETH has amassed significant gains in its value over the past few days amid the global market rally.
ETH eventually broke through the $1300 area and reached a high above $1500. Although ETH is still far from its peak, the second-largest crypto by market capitalization is striving to reach its ATH and beyond.
Featured image from Freepiks, chart from TradingView