TLDR
- DeFi lending has rebounded, with active loans reaching $13.3 billion in July 2024
- Total Value Locked (TVL) in DeFi protocols has recovered to $96.5 billion, up from a low of $37 billion in October 2023
- Lido, EigenLayer, and Aave are leading DeFi protocols by locked value
- DeFi tokens remain significantly below their all-time highs despite the sector’s recovery
- The increase in active loans could indicate growing leverage in the crypto market
The Decentralized Finance (DeFi) sector is showing signs of renewed activity, according to recent data from crypto analytics platforms. Key metrics such as active loans and Total Value Locked (TVL) have seen significant increases since their lows in 2023, suggesting a potential revival of interest in DeFi protocols.
Token Terminal, a crypto market analytics platform, reported that active loans in the DeFi sector have climbed to approximately $13.3 billion as of July 2024.
This figure represents a substantial recovery from the sector’s recent low of $3.1 billion in January 2023. The current level of active loans hasn’t been seen since early 2022, indicating a notable turnaround for DeFi lending.
DeFi lending, which allows crypto holders to earn interest by lending out their assets, is considered an important indicator of overall participation and health in the DeFi ecosystem. The recovery in lending activity suggests growing confidence among users in DeFi protocols.
DeFi waking up again 👀✍️ pic.twitter.com/xrkQqCxGHE
— Token Terminal (@tokenterminal) July 31, 2024
Alongside the increase in active loans, Total Value Locked (TVL) in DeFi protocols has also seen a significant rebound.
Data from DefiLlama shows that DeFi TVL now stands at approximately $96.5 billion, marking a recovery of around 160% from its October 2023 low of $37 billion.
This metric represents the total amount of cryptocurrency locked in various DeFi protocols and is widely used to gauge the overall size and health of the DeFi sector.
The growth in TVL has been particularly strong in 2024, with the figure doubling in the first half of the year. It rose from around $54 billion to peak at $109 billion in June before settling at its current level.
Among individual protocols, the liquid staking platform Lido leads with $38.7 billion locked on-chain. Following Lido are the staking ecosystem EigenLayer and the lending protocol Aave, each with over $11 billion in locked value. These figures highlight the continued dominance of staking and lending services within the DeFi sector.
Despite the positive trends in lending and TVL, it’s worth noting that many DeFi-related tokens are still trading well below their all-time highs.
According to data from CoinGecko, DeFi assets currently hold a market capitalization share of just 3.4%. Tokens of major DeFi platforms like Aave, Curve Finance (CRV), and Uniswap remain more than 80% down from their peak prices, even as the broader crypto market has recovered significantly.
Some market analysts, including Token Terminal, suggest that the increase in active loans could indicate growing leverage in the crypto market.
The recovery in DeFi metrics comes amid broader developments in the cryptocurrency space, including the recent launch of spot Ether exchange-traded funds (ETFs) in the United States. These ETFs reportedly drove $2.2 billion in inflows, highlighting ongoing institutional interest in the crypto sector.
