After a first ATH in May, the DeFi ecosystem, both on Ethereum and other blockchains, experienced a lull during June and July. Nevertheless, the ecosystem has just experienced another rebound since the beginning of August.
New TVL record for DeFi
Since its inception, the effervescence of the DeFi ecosystem has been measured through its TVL, for Total Value Locked, namely the total funds that are deposited through the various DeFi protocols.
On August 22, the latter broke a new TVL record with $157 billion in digital assets deposited across the various DeFi protocols. Obviously, this value aggregates TVLs from all protocols with a DeFi ecosystem. Since then, TVL has gone back down, with a current value of $146 billion.
Unsurprisingly, Ethereum tops the list with $107 billion, followed by the BINANCE Smart Chain with $18 billion, then Polygon with $4 billion. The remaining $16 billion comes from other blockchains such as Avalanche, Solana or Terra.
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DeFi tokens benefit
This increase in TVL was not necessarily caused by the arrival of new funds. Indeed, this one is mainly the consequence of a recent rise in the price of cryptocurrencies.
For their part, DeFi tokens have also benefited from this bull market. For example, the 141 tokens identified as belonging to DeFi by Messari have averaged a 43% increase over the past 30 days.
The top 10 currencies in this ecosystem, meanwhile, have seen a rise of at least 20%, with the exception of the AMP token. The Thorchain protocol's RUNE crypto has seen a 134% increase over this period, despite recent attacks on the protocol.
Avalanche enters the big league
Long the newest kid on the DeFi blockchain blockchain blockchain blockchain blockchain blockchain Avalanche has managed - in the space of just a few days - to attract massive flows of funds.
While its TVL had been hovering around $200 million since March, it has seen an 860% increase from $200 million on August 9 to $1.72 billion at the time of writing.
The network has benefited in particular from an influx of users fleeing the high costs of the Ethereum blockchain. A phenomenon that we had already allowed the Binance Smart Chain, and then Polygon, to shine around the months of May and June.
Note that the TVL is not an absolute metric. Indeed, it is extremely hard to calculate because of the constant multiplication of DeFi protocols. Moreover, the composability of the latter tends to distort the values, with cash that can be counted twice, when it is deposited on protocol A and the token obtained that represents the deposit is then deposited on protocol B.
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