As 2022 begins, the decentralized finance (DeFi) sector of the cryptocurrency ecosystem appears to be gaining momentum in what could be an echo of the bull market seen in early 2021.
Data from crypto market intelligence firm Messari shows that over the past 30 days, five of the top 10 DeFi protocols have seen their tokens achieve double-digit gains. This is despite the difficulties Bitcoin has faced, a dynamic that usually puts downward pressure on the broader crypto market.
A deep dive into the data shows that Aave (AAVE), Curve (CRV) and Spell Token (SPELL) have outperformed the majority of the field but what is behind these bullish outbreaks?
In the case of AAVE, the December 28 introduction of real-world assets (RAW) into the protocol represents the next advance in DeFi capabilities. Users will now be able to borrow against token forms of traditional assets such as real estate, merchandise, freight bills and advances.
Curve and Abracadabra Money’s integration of stablecoins across the DeFi ecosystem has elevated their position as core components of DeFi and this is reflected in the price growth of the native token.
Increasing metrics highlight strength of DeFi build
More evidence of the building momentum in the DeFi space can be found by looking at the various metrics within the ecosystem. These metrics include active users and total value insured.
According to data from Dune Analytics, the number of DeFi premium users has continued to rise over time and is currently at a record high of 4,304,478 unique wallets.
Activity shown on decentralized exchanges (DEX) has also been on the rise over the past few months. Data from Dune Analytics shows that May 2021 was the only month in which DEX trading volume was higher than seen in November and December 2021.
As a way to see how much the DeFi ecosystem as a whole has grown in the past two years, the volume of trading on decentralized exchanges in the first four days of January has exceeded the volume seen during the entire month of July 2020, when the “Summer of DeFi” movie started gaining momentum.
Related: Crypto funds attracted $9.3 billion in inflows in 2021 as institutional adoption grows
TVL is approaching its previous all-time high
Overall, one of the best metrics for getting a measure of the growth and trajectory of decentralized finance is the total value locked across all protocols.
According to data from Defi Llama, the current TVL value of all DeFi is $255.87 billion, just $4 billion less than an all-time high of $259.41 billion set on December 2, 2021.
The leading protocols in terms of TVL are Curve at $24.42 billion, Convex Finance at $21.23 billion, MakerDAO at $18.28 billion, and AAVE at $14.62 billion.
The total cryptocurrency market capitalization now stands at $2.234 trillion and the bitcoin dominance rate is 39.4%.
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