Ever since the beginning of 2023, we have seen a strong recovery in the entire crypto and Web3 industry post the bear run of 2022. There has been broad base recovery in the overall crypto market capitalization - where the crypto market cap has risen from the $750 billion to over the $1 trillion mark - scripting a near 36% recovery in the month of January alone.
Along with the recovery in the crypto market cap, we saw the total-value-locked in decentralized finance (DeFi) also saw strong recoveries at the same time. In the month of January 2023 - we saw the TVL in DeFi increase from $38.8 billion to $47.8 billion - staging a recovery of a solid 23% in the same timeframe.
To put this into context, back in the early days of November 2022, post the catastrophic crash of the FTX crypto exchange - we saw the TVL in DeFi crash from $56 billion all the way down to $40 billion - a 28% crash in about two weeks since the incident.
According to a research report by DappRadar,
“The DeFi market showed signs of recovery in January 2023.”
DappRadar is a global app store for decentralized applications (dApps). It enables users to track, analyze and discover new dApps with over 12,000+ dApps across 50+ blockchain networks.
In the same month - Lido, which has the largest DeFi market share with 14.75%- recorded a hefty 36.77% increase in its TVL to touch nearly $8 billion. Tron and BNB Chain, with $5.1 billion and $4.9 billion in TVL respectively, secured second and third positions, according to data from DefiLlama.
Also, to further add to that, Optimism was the biggest DeFi performer in the month of January 2023 which managed to record a 43% jump in TVL in DeFi - having jumped up from $500 million to around $715 million at the end of January 2023.
Along with that, Solana, which has been one of the worst affected blockchain in this round of the bear market in 2022, amid a series of network outages and hacks on the platform - this was once touted as an 'Ethereum-killer', has gone from a little over $1 billion in TVL before the collapse of the FTX exchange down to $200 million by the end of 2022. But since the beginning of 2022, it has gone from the $200 million region up to $283 million in January 2023 alone.
The world of DeFi has seen a lot of attention all through the past year despite the bearish price action we saw in the crypto market amid the bear run. Recently, one of the co-founders of the 1-inch network Anton Bukov - highlighted the importance of DeFi platforms. Bukov even went on to state,
“The key to DeFi adoption among institutional investors is a deep understanding of transparency benefits, trustless approach and self-custodian technologies.”
Thus, overall things look to be on the positive side as all aspects of the crypto and Web3 industry seem to be moving in the right direction. While the overall crypto market capitalization has managed to sustain itself above the $1 trillion mark, according to data from CoinMarketCap, the total-value-locked (TVL) in DeFi is just shy of breaking out of the $50 billion mark.
Values as on 13 February, 2023.
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