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Decentralized Finance TVL Rises 20% in 2023 | Liquid Staking Leads Markets

  • DeFi TVL has regained control of more than $50 billion.

  • Lido is the industry leader in liquid staking platforms.

  • Algorand TVL has increased by 123% in one week.

Decentralized Financ

Since the beginning of the year, collateral for decentralized 

Finance (DeFi) has been increasing. The surge has replicated the crypto market rally as confidence gradually returns.

For the first time in ten weeks, the dollar amount of collateral locked in DeFi protocols has surpassed $50 billion. Furthermore, the total value locked (TVL) has increased by around 20% since the beginning of the year.

TVL is currently at $52.8 billion, its highest level since November 9, according to DeFiLlama. Over the last seven days, most leading DeFi protocols have seen double-digit increases in collateral. Around $8.4 billion has returned to the DeFi ecosystem since its cycle low on January 1.

However, most of this might be attributed to increases in the underlying crypto assets as markets rally. It should also be mentioned that DeFi TVL was still 75% below its all-time high in December 2021.

Leading DeFi Liquid Staking

Aside from rising collateral values, liquid staking derivatives have fueled market activity. Lido presently has a 14.75% market share in the DeFi market. Furthermore, it is gaining ground on the former DeFi king, MakerDAO, which has a 13.25% stake.

As reported by several media outlets, demand for Lido and related services is being driven by liquid staking narratives. This is likely to continue as the Shanghai upgrade, which will progressively release staked ETH, approaches.

On January 17, researcher 'ViktorDeFi' stated that DeFi Prediction Markets are "probably the most underestimated crypto items for 2023."

Prediction markets are speculative markets in which users can make and trade forecasts about future events. They can be for real-world events like sports scores, elections, company product sales, and so on.

He cited several instances, including Polymarket, Azuro, and Zeitgeist, to highlight the increasing popularity of prediction-based protocols.

Algorand TVL is on the rise

DeFiLlama also revealed that Algorand TVL had increased by 123% in the last week. Algorand is a blockchain network with a focus on decentralization and scalability.

It now has $180 million in TVL, with five of the top six leading DeFi protocols on the network gaining triple digits in the last week. AlgoFi, Folks Finance, the Pact DEX, and GARD have all contributed significantly to the ecosystem's growth.

However, Ethereum remains the industry standard, with a market share of nearly 60% and a TVL of $31.5 billion.

Also read: Is GTX, the Crypto Exchange Launched by 3AC Founders, the New FTX?

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