The decentralized finance (DeFi) sector appears to be on the road to recovery after a substantial period of stagnation. Following the collapse of crypto derivative exchange FTX in November last year, the total value locked (TVL) in DeFi platforms dropped from over $50 billion to below $40 billion. This caused a period of stagnation in the DeFi sector, but data from DefiLlama suggest that the crypto sub-sector is back on track as the overall TVL in DeFi platforms again breached the $50 billion mark.
TVL is an important metric for evaluating the health of a blockchain network. The total value locked (TVL) of a blockchain represents the total capital held within its smart contracts. TVL is calculated by multiplying the amount of collateral locked into the network by the current value of the assets. The overall DeFi TVL hit $51.1 billion on February 16th, the first time it reached that level since the FTX crash. The TVL is now down to $48.78 billion at time of writing.
Lido DAO (LDO) has the highest TVL among the DeFi protocols. The total value locked into the platform is now at $8.67 billion, up by 12.07% from last month. The Ethereum (ETH) staking service also accounts for 17.77% of the total DeFi TVL. MakerDao (MKR) follows Lido with $7.4 billion in TVL, marking an increase of 5.95% from last month. Curve DAO (CRV) is next with $4.97 billion, up by 13.89% from last month.
The DeFi sector is an exciting space, offering a wide range of services and products. The sector has seen massive growth in recent years and is set to continue to grow in 2021. This growth is being driven by the increasing demand for DeFi products and services, as well as the increasing number of users entering the space.
The DeFi sector is a key part of the crypto industry and is an important part of the overall crypto ecosystem. The sector has the potential to revolutionize the way financial services are provided, and it is likely that more people will enter the space in the coming years.
The DeFi sector is also likely to benefit from the increasing institutional interest in the crypto space. Institutions are increasingly entering the space, and this is likely to further drive the growth of the DeFi sector. This increased institutional interest is likely to lead to more capital being invested in the sector, which will help to drive further growth.
Overall, the DeFi sector appears to be on the road to recovery. The total value locked in DeFi platforms has again breached the $50 billion mark, and the sector is likely to continue to grow in 2021. The increasing demand for DeFi products and services, as well as the increasing number of users entering the space, is likely to drive further growth in the sector. Additionally, the increasing institutional interest in the crypto space is likely to further drive the growth of the DeFi sector.