On April 3, 2022, decentralized finance (defi) protocols held approximately $163 billion total value locked (TVL). By the start of January 2023, this amount declined to $38.30 billion. Concurrently, in April 2022, the leading defi tokens by market capitalization were collectively worth $135 billion, but by Jan. 1, 2023, their total value had diminished to $33.9 billion. However, both these indicators have seen an upward trajectory over the past year; the TVL rose by 39.16%, and the market valuation of the foremost defi tokens today escalated by over 129% within 12 months.
Defi Witnesses Dramatic Recovery as TVL and Token Valuations Soar in 2023
As 2023 draws to a close, the decentralized finance (defi) landscape has experienced consistent growth throughout the year. Currently, the total value locked (TVL) in defi stands at approximately $53.30 billion, rising from a low of $33.9 billion.
This ascent signifies an impressive increase of over 39%, adding $19.4 billion to the defi space. As we look at the year’s end, prominent defi protocols leading by TVL size include Lido, Maker, Aave, Justlend, and Uniswap.
Notably, Lido, a liquid staking defi protocol, holds a considerable share of the TVL in defi, amassing $20.82 billion, representing 39% of the combined TVL in the entire defi ecosystem. In the realm of defi, Ethereum continues to lead with 53.93% of the total value locked on its blockchain.
Tron follows with a significant 15.27%, while Binance Smart Chain (BSC) captures 5.97% of the total locked value across the sector. Currently, as reported by coingecko.com regarding the top defi coins by market capitalization, the defi token crypto economy boasts a valuation of $78.03 billion.
Over the past year, this top-tier defi token market has expanded by $44 billion. The leading defi tokens, ranked by market valuation, currently include STETH, LINK, DAI, UNI, and INJ, in that order.
At the close of last year in December, the dominant five defi tokens were STETH, DAI, UNI, LINK, and FRAX, respectively. Among these, DAI and FRAX are stablecoins, with DAI maintaining a relatively stable market cap at $5 billion and FRAX’s circulation decreasing from $1 billion to the current $647 million.
STETH, which aligns somewhat with ETH’s value, was priced at $1,185 per coin on Dec. 30, 2022, and now hovers around $2,268 per STETH. LINK, which was valued at $5.45 per coin last year, has risen to $15.54 per unit.
Meanwhile, INJ has experienced a significant increase from $1.29 per coin to $41.96, marking a 3,152% increase. As 2023 concludes, the defi landscape presents a narrative of recovery and cautious optimism.
With total value locked climbing to $53.30 billion and defi tokens appreciating significantly, the year marked a notable turnaround from its subdued start. While these figures represent current health and growth, the future of defi remains open to diverse possibilities, reflecting the inherent dynamism and evolving nature of decentralized finance.
What do you think about the state of defi improving in 2023? Share your thoughts and opinions about this subject in the comments section below.