TVL DeFi Industry Surges Back To Pre-FTX Crash Heights

The total value locked (TVL) in the DeFi sector has rebounded to $53 billion, the highest level since the FTX ‘disaster’ in November 2022.

According to data from DefiLlama, the total value locked (TVL) of all projects in the DeFi space has just set a new high for 2023 at $53 billion, a level not seen since the FTX crash in November 2022.

Specifically, from a TVL of $28 billion at the beginning of the year, the locked-in value of the DeFi industry has increased by 36% to close out 2023 at $53 billion. However, this figure is still less than a third of the $165 billion level of the April 2022 period, before the LUNA-UST collapse brought down the crypto market.

Notably, the DeFi sector saw its most robust recovery in the last three months of the year, buoyed by the surge in the cryptocurrency market due to Bitcoin ETF momentum.

Additionally, significant developments across various protocols throughout 2023 are believed to have contributed to the swift resurgence of the DeFi sector.

MakerDAO stands out prominently with its Real World Asset (RWA) strategy, converting $2.5 billion in collateral assets for the DAI stablecoin into US Treasury-backed bonds, incentivizing further investor holding of the stablecoin. Maker also introduced the Spark Protocol, a lending protocol aimed at enhancing liquidity. Thanks to this model shift, Maker emerged as the highest revenue-generating DeFi project of the year.

Similarly, Lido Finance gained prominence following the post-Shanghai upgrade trend of Liquid Staking on Ethereum in April 2023, currently holding one-third of the total ETH staked. Lido stands as the largest TVL DeFi protocol, locking over $21 billion in assets.

The leading DEX Uniswap launched version 4, with many improvements in the trading process and anti-MEV features.

However, there were still risks that threatened the stability of the DeFi sector in the past year, the most notable of which was the Curve Finance attack that revealed the founder’s loan position linked to many other projects, as well as a series of hacks that caused hundreds of millions of dollars in damage.

* We hope this information will help you in your investment process, but this is not investment advice. Every investment carries risk, especially in this industry, so DYOR before making a decision.