DeFi Market Analysis: Trends, Statistics, and Future Outlook

DeFi Market Analysis: Trends, Statistics, and Future Outlook

By SimpleSwap | SimpleSwap Blog | 19 Jun 2024


Imagine a world where there are no banks, where sending money is as easy as sending a text, and where your savings earn interest 24/7 without any financial institution. That would be a wonderful world of Decentralized Finance (DeFi). DeFi knows how to shake things up in the financial sphere. It remakes all the old rules with the help of blockchain technology. This article we’ll learn interesting statistics about the DeFi sector, its top blockchains and protocols, so let’s get started!

Current Trends in DeFi

The emergence of DeFi was a big event in the Crypto World comparable to the advent of the first cryptocurrency. Bitcoin (BTC) appeared as the new means of payment, while DeFi became the new banking system. Users simply needed to register their own crypto wallets to gain access to this groundbreaking, institution-free currency.

Over time, it became clear that both Bitcoin and DeFi had some technical inconsistencies, issues, and risks for users. So developers are trying to fix all of that over time. Here’s the current state of DeFi with all this hard work:

  • Rapid growth

The total value locked (TVL) in DeFi protocols, which measures the amount of assets deposited in these protocols, has grown from a few hundred million dollars in 2019 to over $50 billion by mid-2024.

  • Greater choice of services

DeFi offers a wide range of services including decentralized exchanges (DEXs), stablecoins, yield farming, staking, and insurance.

  • Improved security measures

Protocols now undergo rigorous audits, and new solutions like decentralized insurance and multi-signature wallets have been developed to protect users' funds.

  • Regulatory Developments

Some governments create frameworks that ensure user protection without stifling innovation. 

State of DeFi in 2024

DeFi demonstrates a remarkable growth in 2024 characterized by substantial uptick of user activity and the rise of new narratives, following the overall growth of the crypto market and renewed optimism of market participants. Total value locked (TVL) in the DeFi sector has climbed from $112B in Q4 2023 to $221B in June 2024, a 97.3% growth. Liquid restaking became a new driver for DeFi in 2024 showing an explosive growth of TVL from $0.28B in January to $14.7B in June, an unbelievable 5150% growth. Among other categories, yield farming and restaking protocols show the highest TVL growth in 2024 so far. 

Top 10 DeFi categories by TVL in 2024

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Source: DefilLama

EigenLayer solidifies its positions as the new DeFi “blue chip”, ranking 3rd by TVL among all DeFi protocols following only Lido Finance and AAVE. EigenLayer also became a new DeFi primitive that triggered the rise of the new DeFi infrastructure based on this protocol. Liquid restaking protocols Renzo and EtherFi climbed to the top 10 protocols by TVL as well.

Top 10 DeFi protocols by TVL in 2024

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Source: DefilLama

The rise of DeFi in 2024 is also confirmed by on-chain metrics. Daily transactions in DeFi protocols rose since the beginning of the year from 30M to 43.6M (+45.4%), while active addresses connected with DeFi surged from 471K to 791K for the same period. 

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DeFi Daily Transactions and Active Addresses in 2024 (7D Average). Source: Artemis

DeFi states as one of the largest gas consumers in 2024. The peak of gas consumption was in early March with a record of $80M gas consumed (7D Average) that represents a 530% growth since the beginning of the year. In late May 7D average gas consumption of DeFi protocols was $18.1M reflecting the cooling off crypto market and decline in DeFi activity of users. 

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Gas Consumed by DeFi Protocols (7D Average). Source: Artemis

Ethereum (ETH) remains the leading DeFi hub with $149B TVL, while Solana solidified its positions in 2024 and became the second largest blockchain with TVL $10.5B following the memecoin boom and surge of DEX-related activity on this network. Layer 2 has also strengthened their positions as major liquidity hubs with 4 chains – Arbitrum, Blast, Base, and Linea standing in the top-10 blockchains by total value locked.

Top 10 Blockchains by TVL in 2024 (as of June 2024)

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Source: DefilLama

DeFi experiences a solid growth in 2024 with fresh narratives and projects entering the space, fueling the user’s activity and inflow of liquidity into the DeFi protocols. Restaking and liquid restaking exploded into the DeFi landscape with record inflow of liquidity and new users, while other sectors like DEXes, lending, and yield farming protocols show a more moderate, but stable growth. L2 became a crucial part of DeFi with several chains climbing to the top blockchains by TVL with more than $1B liquidity in its ecosystems for each. The rise of DeFi in 2024 is a strong factor contributing to the overall growth of the crypto market and reflecting the positive investor sentiment about the industry. 

Future outlook

No one can tell exactly what the future of DeFi will look like, but we can try and predict few things that this selector might soon achieve: 

  • Integration with traditional finance
  • Enhanced user experience
  • Cross-chain compatibility
  • Growth of Decentralized Autonomous Organizations (DAOs)
  • Increased regulatory clarity

Conclusion

Cryptocurrencies are steadily capturing the modern world. They are no longer just a novelty, it's one of the means of payment that is accessible worldwide. So it comes with no surprise that the DeFi sector is growing. Major blockchain platforms are rolling out large-scale updates, and the DeFi sector is keeping pace with these advancements.

The DeFi market is still in its early stages, and its full potential is yet to be realized. In 2024, DeFi showcased impressive growth, marked by a significant increase in user activity and the emergence of new narratives. This surge parallels the overall expansion of the crypto market and the renewed optimism among market participants.

If you want to learn more interesting facts about crypto then check out our blog! You might like our articles “The Use of Cryptocurrencies in Mitigating Hyperinflation” and “Top 5 Crypto Trading Strategies”.

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