The decentralized financial sector continues to be in full swing as multiple tokens hit new all-time highs and the total value set in the DeFi protocols increases with each week.
Data from Messari shows that projects like AAVE, Uniswap (UNI), SushiSwap (SUSHI), and Synthetix (SNX) have increased double digits, creating a positive feedback loop as more users engage with the protocols to get and from farm Flash Loans Benefit.
As Bitcoin (BTC) and Ether (ETH) prices have hit new highs in recent months, the Total Value Locked (TVL) in DeFi has also increased, increasing optimism and engagement across the various decentralized exchanges and lending platforms. Data from CoinGecko shows that DeFi’s total market cap has risen to $ 45 billion in the past six months.
From January 1st through January 25th, TVL on DeFi platforms collectively rose from $ 15.6 billion to a record high of $ 26.1 billion.
According to DeFi Pulse, the total value set in the DeFi protocols has increased from $ 21.49 billion to $ 26.173 billion in the last four days alone.
That sharp spike in TVL was aided by a $ 400 rise in ether price from $ 1,053 on Jan 21 to a new all-time high of $ 1,459 on Jan 25. However, Ether cannot explain all of the gains, as demonstrated by the increasing number of DeFi tokens that are also securing new all-time highs.
Despite these impressive developments, the DeFi sector only accounts for 4.6% of the total market capitalization for cryptocurrencies, which is currently $ 976.6 billion.
Although DeFi makes up only a small portion of the total crypto market, its rapid growth suggests that the sector is poised for explosive growth as cryptocurrency becomes more mainstream.