Liquid Staking Drives DeFi TVL to Highest Level Since April 2022

The decentralized finance (DeFi) sector’s total value locked (TVL) has surged to its highest levels since 2021, driven by liquid staking, lending and yield protocols.

DeFi TVL surpassed $215 billion, up 53% in the past month and 119% since December, according to data from DeFiLlama. This level is the highest since April 2022.

This recent spike in TVL, which follows months of stagnation, signals users are coming back to DeFi to put their crypto to work as they seek to leverage the current bull market.

“The recent surge in DeFi TVL reflects a renewed investor interest in the sector, driven by innovations in yield farming and liquid staking,” Alan Orwick, Co-Founder at Quai Network, said. “As meme coins capture the limelight, DeFi's growth potential remains robust due to its foundational role in blockchain finance, offering tangible utility and integration with traditional finance through tokenization of real-world assets.”

The DeFi protocols of more than $100 million in TVL which had the biggest increases in assets locked are CIAN Protocol, which increased by 2,220% in the last 30 days. A second top contributor was Abacus, which spiked by +965% in the past month. Rounding out the top three is Izumi Finance, up 330% in the past month.

The CIAN Protocol operates as a yield automation platform on Avalanche, Ethereum, Base, BSC, Polygon, Optimism, Arbitrum and Scroll. Abacus, a liquid staking and valuation protocol, specializes in unlocking liquidity for non-fungible tokens (NFTs) and other illiquid assets on Avalanche, Scroll, Arbitrum, Mantle, BSC, and Arbitrum. Izumi Finance is a multi-chain DeFi protocol specializing in liquidity and yield optimization and can be found on dozens of chains, including Arbitrum and Avalanche.

Dozens of other protocols also increased by more than 60% in the last month, according to DefiLlama, beating ETH’s 60% increase.

Liquid Staking and Lending

Of the top 50 major DeFi protocols with the biggest gains in TVL, around 25% are in the liquid staking sector, 16% are in yield farming and 12% are in lending or CDPs. Notably, of the top 10, three are in the Cardano blockchain, which aligns with the recent surge in the ADA token.

Another factor that is contributing to the growth of DeFi’s TVL is a more risk-tolerated mindset among investors following the US election results, said Sidney Powell, the Co-Founder and CEO of Maple Finance.

Powell added that higher lending yield as demand for leverage increases is also making the sector more attractive.

“The run up in price has created attractive yield opportunities,” he said. ”We're seeing this in protocols like Ethena which grew by over a $1 billion recently to become the third largest stablecoin and where the yield has been above 20%.”

Looking ahead, DeFi should continue growing as it delivers long-term utility beyond short term speculation.

“As the ecosystem continues to mature – with enhanced security, better opportunities, and more use cases – we’re optimistic that growth will continue steadily,” said Adam Bendjemil, a contributor at Core, a Bitcoin-powered, EVM-compatible blockchain. “While meme coins may grab the spotlight, the underlying appeal of DeFi lies in its ability to deliver tangible value and financial utility, which keeps users engaged."