Ethereum Restaking Initiatives Fuel Near Doubling of DeFi TVL in Q1 2024
Summary:
In Q1 2024, the total value locked (TVL) in decentralized finance (DeFi) almost doubled compared to Q4 2023, driven by Ethereum liquid restaking initiatives. According to Messari and DefiLlama, the TVL in DeFi surged from a low of $36 billion up to a two-year high of $98 - $101 billion. Another significant trend observed was a marked increase in liquid staking with Lido leading the charge. Despite a recent 11% drop in DeFi TVL due to crypto market fluctuations, analysts are optimistic about continued DeFi growth.
The total value locked (TVL) in decentralized finance (DeFi) nearly doubled in the year's first quarter compared to the final quarter of 2023, according to recent studies. This growth was primarily driven by liquid restaking initiatives on Ethereum. DefiLlama reports that DeFi TVL soared from a late 2023 low point of $36 billion to nearly $97 billion in the opening quarter of 2024. From the start of the year, it has grown by 81% to a two-year high of $98 billion, achieved last week.
Meanwhile, Messari reported slightly higher TVL figures on April 18, noting that DeFi collateral rose by 65.6%, quarter-on-quarter, to reach $101 billion. The report attributes this rise to the growth in asset prices and liquid restaking. It states that Ethereum's TVL growth, which soared by nearly 71%, was among the primary factors driving the increase.
QuickNode along with Artemis, an institutional crypto data platform, echoed these findings in their April 18 report. They noted, "Staking, liquid staking, restaking, and liquid restaking have significantly fueled DeFi's recent remarkable growth," thereby explaining why staking has become a substantial portion of DeFi's TVL.
On March 13, liquid staking TVL hit a record high of $63 billion, mainly driven by Ethereum's liquid staking protocol, Lido, which currently holds a 62% market share of the liquid staking ecosystem. At the same time, protocols like EigenLayer saw a surge in popularity. EigenLayer's TVL, for instance, jumped by an astonishing 990% in the initial months of 2024, finishing the quarter with $12 billion.
Furthermore, QuickNode reported a substantial 291% quarter-on-quarter rise in user activity, sparking optimism for a second 'DeFi Summer,' as growth signals indicate a transformative shift, despite hindrances from the SEC.
However, following the recent downturn in the crypto market, DeFi's TVL has dropped 11% to $86.6 billion. Yet, developments in the sector, such as China and the crypto ETFs, Thai NFT music festival, and the addition of KuCoin's 1.3M new bots, suggest continued growth potential.
Published At
4/19/2024 6:32:23 AM
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