DeFi TVL Surges 150% in 2024, Nearing 2021 Heights

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As a seasoned researcher with over two decades of experience in the financial industry, I must say that the current growth of the decentralized finance (DeFi) ecosystem is nothing short of exhilarating. The surge in total value locked (TVL), reaching $133.88 billion as of December 9, mirrors the excitement and potential that I first sensed when I started exploring this space a few years back.

The decentralized finance (DeFi) sector is experiencing a significant surge in growth, as the total value locked (TVL) approaches levels last seen in 2021. As of December 9th, according to DefiLlama, TVL has soared beyond $133.88 billion, representing a strong 150% increase from the beginning of the year. While it hasn’t quite reached the $170 billion peak from 2021, it’s evident that DeFi is experiencing a renewed period of prosperity.

What’s fueling this increase? The significant rise of liquid restaking tokens (LRTs) and the rapid growth of Bitcoin layer 2 networks (L2s) are making a substantial impact. Additionally, the overall upward trend in cryptocurrency prices, propelled by the 2024 bull market, is also contributing to this surge.

Kairos Research stated that we’re just beginning in terms of both re-staking and cryptocurrencies as a whole. In the future, institutions will have numerous strategies, tailored to risk levels, for maximizing returns when they stake their Ether.

EigenLayer Dominates Restaking with $17B TVL

Restaking involves using previously staked tokens to reinforce other blockchain projects. This approach has gained significant traction, as demonstrated by EigenLayer, a leading player in the restaking field, which debuted in 2023 and amassed more than $17 billion in Total Value Locked (TVL), as reported by DefiLlama.

The rise of EigenLayer gave birth to an ecosystem of liquid restaking token protocols. One standout is Ether.Fi, which allows users to mint tradable tokens representing their claims on restaked assets. As of December 9, Ether.Fi holds over $9 billion in TVL. Other notable players in this space include Renzo and Kelp.  

As per Kairos Research findings, the combined TVL (Total Value Locked) for the top five Liquidity Routing Tokens (LRTs) currently stands at around 3.38 million Ether, equivalent to a staggering $12.5 billion in value. On top of this, DefiLlama reports that the total TVL across all types of LRTs, including various restaking tokens, exceeds an impressive $16 billion.

Lido and Bitcoin LSTs Add to the Momentum  

Lido, a leading liquid staking token protocol, continues to be Defi’s largest provider of Total Value Locked (TVL), with nearly $40 billion worth of assets staked. Approximately 10% of the staked Ether within Lido (stETH) has been re-staked through EigenLayer. Regarding Bitcoin, liquid staking tokens are experiencing rapid growth in popularity. As per Staking Rewards, Bitcoin’s liquid staking tokens currently manage over $2.5 billion in TVL.

This year, CoreChain started doling out staking incentives, and Babylon intends to do the same shortly. The leading Bitcoin Staking Token (LST) is Lombard, managing approximately $1.15 billion in Total Value Locked (TVL), with Solv not far behind, holding roughly $1 billion.

According to previous reports by CoinSpeaker, the decentralized finance (DeFi) sector associated with Ethereum has achieved significant milestones recently. Specifically, the total value locked (TVL) in Ethereum reached over $80 billion for the first time in two years around late November. On November 21, Ethereum retook its leading position from Tron, and this advantage was further extended on November 23 when Tether minted approximately twice as much USDT ($2 billion) on Ethereum compared to what was minted on Tron ($1 billion).

It’s clear that Ethereum’s reign in Decentralized Finance (DeFi) is still strong and likely to continue. Furthermore, Bitcoin-backed staking solutions are aiding in broadening the ecosystem’s horizons beyond its original limits.

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2024-12-10 01:18