• The DeFi ecosystem total value locked (TVL) has increased by nearly 20% since the beginning of 2021.
• Major DeFi protocols such as Lido Finance and MakerDAO have played a significant role in the DeFi TVL rise.
• Liquid staking protocols like Lido Finance have been the accelerator of the DeFi ecosystem surge, with a market share of 14.75%.
The Decentralized Finance (DeFi) sector has long been an evolving space and the ecosystem total value locked (TVL) has been steadily increasing since its early days. However, the bear market of 2021 caused a significant downturn in many sectors of the Web3 space, including DeFi. Despite this, the DeFi TVL has been on the rise since the beginning of the year, with a near 20% surge in total locked value.
The recent mini bull run has been the driving force behind the DeFi TVL increase, with the total locked value reaching its highest point in the past two months at over $45 billion. Major DeFi protocols such as Lido Finance and MakerDAO have played a significant role in this growth, with the former increasing its TVL by $8.4 billion since its lower low late last year. MakerDAO’s market share has been overtaken by liquid staking protocols such as Lido Finance, as the Ethereum Merge triggered the popularity of these protocols. This has resulted in Lido Finance having a 14.75% market share and MakerDAO standing at 13.25%, according to DeFiLlama.
The DeFi ecosystem has seen a resurgence of activity despite the bear market and the surge in DeFi TVL is a testament to this. However, the DeFi sector still has a long way to go to reach its all-time high seen in 2021. With the increasing popularity of liquid staking protocols, it’s possible that the DeFi ecosystem will continue to grow and reach its former heights.