After Years of Fluctuations, DeFi TVL Recovers in 2024

• DeFi TVL reached $192 billion in 2024, marking the highest level in 15 months and signaling renewed growth.
• RWA now account for 3.69% of DeFi’s TVL, with MakerDAO leading the asset integration trend.

The DeFi sector has experienced significant growth, with a tremendous increase in Total Value Locked (TVL) since the explosive time known as the ‘DeFi Summer’ of 2020, according to IntoTheBlock. For decentralized finance, this era was momentous and attracted the interest of investors all over.

Following that summer, changing investor sentiment, regulatory uncertainty, and market conditions caused variations in TVL in the DeFi space. But in 2024, DeFi is once again on an increasing trend as TVL data show encouraging recovery indications and draw fresh investment interest.

Between 2019 and 2020, DeFi experienced explosive growth, culminating in the ‘DeFi Summer’ of 2020, when Total Value Locked (TVL) surged dramatically.

Could we be on the brink of another phase of similar expansion in DeFi? pic.twitter.com/BYzuScOvig

— IntoTheBlock (@intotheblock) November 5, 2024

DeFi TVL Reaches New Highs as Ethereum and Solana Lead Growth in 2024

DeFi TVL shot to $192 billion in May 2024, up 17% from the month before. With the greatest TVL levels seen in 15 months, this recent peak shows a clear industry comeback. Especially, a lot of this expansion results from the increasing value of important smart contract systems like Ethereum (ETH) and Solana (SOL), both of which draw large amounts of money still.

DeFi’s TVL has been much enhanced by the price appreciation of these tokens, which creates a positive feedback loop since higher values generate more interest in DeFi protocols.

Concurrently, some protocols are clearly growing remarkably. For instance, EigenLayer saw a clear rise in TVL, which as of March 2024 came to $10 billion.

The removal of limits on token restaking, an invention that has let users more efficiently reallocate money inside the DeFi ecosystem, is mostly responsible for this significant increase. Reflecting a larger trend of conventional financial institutions expressing more interest in DeFi projects, institutional investments have also helped to drive this rise.

DeFi’s growing ecosystem—especially in terms of integrating real-world apps—is another important element fostering the comeback. The possibility of decentralized finance linking with real-world assets (RWAs) has drawn attention from investors, closing the distance between traditional finance (TradFi) and DeFi.

This tendency emphasizes DeFi’s flexibility and ability to interact with the bigger financial system, objectives in line with those of institutional investors.

On the other hand, according to CNF, RWA systems now account for 3.69% of DeFi’s total value locked, a significant rise from 1.77% in July 2024. MakerDAO is leading this trend; it has greatly broadened its revenue sources by including real-world assets into its ecosystem, therefore producing over 60% of its income from these interactions.

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