3 Key Indicators Show DeFi’s TVL On The Brink Of A New ATH

As 2022 gets underway, the decentralized finance (DeFi) sector of the crypto ecosystem appears to be gaining momentum in what could be an echo of the bull market seen in early 2021. .

Data from crypto market intelligence firm Messari shows that in the past 30 days, 5 of the top 10 DeFi protocols have seen their tokens increase by double digits. This comes despite the difficulties Bitcoin has faced, a dynamic that often puts downward pressure on the broader crypto market.

Top 10 DeFi content. Source: Messari

Digging deeper into the data shows that Aave (AAVE), Curve (CRV) and Spell Token (SPELL) have outperformed the majority of the sector but what is behind these bullish breakouts?

In the case of AAVE, the introduction of real-world assets (RAW) into the protocol on December 28 represents the next step forward in DeFi’s capabilities. Users will now be able to borrow against cryptographic forms of traditional assets such as real estate, merchandise, shipping bills, and payment advances.

The integration of stablecoins in the DeFi ecosystem by Curve and Abracadabra Money has enhanced their status as integral components of DeFi and this is reflected in the price growth of their native tokens. .

Incremental indicators highlight DeFi’s building strength

More evidence of building momentum in the DeFi space can be found by looking at various metrics within the ecosystem. These metrics include active users and total locked values.

According to data from Dune Analytics, the number of unique users in DeFi has continued to climb higher over time and is currently at a record high of 4,304,478 unique wallets.

Total DeFi users over time. Source: Dune Analytics

The activity shown on decentralized exchanges (DEXs) has also been increasing over the past few months. Data from Dune Analytics shows that May 2021 is the only month with higher DEX trading volumes than November and December 2021.

Monthly DEX volume by project. Source: Dune Analytics

As a way to see how much the entire DeFi ecosystem has grown over the past two years, the trading volume on decentralized exchanges during the first four days of January surpassed the volume seen in the last four days of January. all of July 2020, when the “DeFi summer” is starting to gain momentum.

TVL approaches previous all-time high

Overall, one of the best metrics for gauging the growth and trajectory of decentralized finance is the total value locked across all protocols.

Total value locked in DeFi. Source: Defi Llama

According to data from Defi Llama, the current TVL of all DeFi stands at $255.87 billion, just $4 billion less than the all-time high of $259.41 billion, set on May 2. 12 year 2021.

The leading protocols for TVL are Curve with $24.42 billion, Convex Finance with $21.23 billion, MakerDAO with $18.28 billion, and AAVE with $14.62 billion.

The overall crypto market capitalization stands at $2,082 trillion and Bitcoin dominance is at 39.6%.


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