The decentralized finance (DeFi) sector has undergone significant changes since the market crash of 2022 and is now reaching historic highs.
Recovery of the DeFi Sector
After significant losses in 2022, where DeFi lost $3.6 billion to hacks and the impacts from the crash of major projects like FTX and Terra Luna, the sector is beginning to rebound. The total value locked (TVL) is once again reaching 2022 levels, with active loan volumes on platforms like Aave and Ethereum significantly increasing.
Ethereum at the Forefront
Ethereum continues to dominate the DeFi sector, hosting over 60% of all DeFi assets and half of the stablecoins. The market cap of Ethereum has increased by over $150 billion since early July, with the total TVL on the platform exceeding $80 billion, far surpassing that of Solana and Bitcoin.
Future Prospects of DeFi
Factors contributing to the recovery of DeFi include the maturity of the crypto market, the growing popularity of decentralized exchanges, and the emergence of liquid staking platforms. Investors are also closely monitoring the U.S. loose monetary policy, which could positively impact the overall crypto market.
The DeFi sector is showing significant signs of recovery, with Ethereum maintaining a leading position. This opens new opportunities for further market growth.
