Decentralized finance (DeFi) staking has been on the rise since the beginning of the year. The move has mirrored the rally of the crypto market as confidence is slowly returning.
The dollar amount of collateral locked in DeFi protocols has exceeded $50 billion for the first time in ten weeks. Furthermore, the Total Value Locked (TVL) has increased by almost 20% since the beginning of the year.
According to DeFiLlama, TVL currently stands at $52.8 billion, the highest level since November 9th. Most major DeFi protocols have seen double-digit gains in collateral over the past seven days. Since its cycle halving on January 1st, approximately $8.4 billion has been returned to the DeFi ecosystem.
However, much of this can be attributed to gains in underlying crypto assets as the market rally. It should also be noted that DeFi TVL is still down 75% from its peak in December 2021.
Liquid Staking Leading DeFi
In addition to rising collateral values, liquid collateral is driving the derivatives market. Lido now has the largest DeFi market share with 14.75% dominance. Furthermore, it is breaking away from the former king of DeFi, MakerDAO, which holds a 13.25% stake.
As reported by BeInCrypto, Liquid staking narratives are driving demand for Lido and similar services. This is likely to continue in the run-up to the Shanghai upgrade, which will gradually release staked ETH.
On January 17, researcher ‘VictorDeFi’ said that DeFi Prediction Markets are “arguably the most underestimated crypto thesis for 2023.”
Prediction markets are speculative markets that allow users to make predictions and trade on future events. They can be for real-world events such as sports results, elections, company product sales, etc.
He used a few examples to demonstrate the growing growth for prediction-based protocols, such as Polymarket, Azuro, and Zeitgeist.
Algorand TVL Surging
DeFiLlama also noted that Algorand TVL is up 123% in the past week. Algorand is a high-throughput blockchain network with an emphasis on decentralization and scalability.
It currently has $180 million in TVL, with five of the top six major DeFi protocols on the network posting triple-digit gains over the past week. AlgoFi, Folks Finance, Pact DEX and GARD have provided major momentum to the ecosystem.
Ethereum remains the industry standard, with a market share of around 60% and a TVL of $31.5 billion.
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