{"id":23072,"date":"2024-08-04T15:30:22","date_gmt":"2024-08-04T19:30:22","guid":{"rendered":"http:\/\/leadingcryptonews.com\/these-key-metrics-are-driving-defi-to-2022-highs\/"},"modified":"2024-08-04T15:30:22","modified_gmt":"2024-08-04T19:30:22","slug":"these-key-metrics-are-driving-defi-to-2022-highs","status":"publish","type":"post","link":"https:\/\/leadingcryptonews.com\/these-key-metrics-are-driving-defi-to-2022-highs\/","title":{"rendered":"These Key Metrics Are Driving DeFi to 2022 Highs"},"content":{"rendered":"


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The decentralized finance (DeFi) sector is witnessing a resurgence, marked by growth in key metrics such as active loans and total value locked (TVL) from their 2023 lows.<\/p>\n

DeFi lending, an important component that enables investors to lend their crypto holdings in exchange for interest, is an indicator of DeFi participation and overall market health.<\/p>\n

Active Loans Hit $13.3 Billion as TVL Soars By 160%<\/h2>\n

In a recent post on X, crypto market analytics platform Token Terminal reported a notable rise in active loans within the DeFi sector, now reaching approximately $13.3 billion, levels that were last seen in early 2022. The post added that the increase in lending activity suggests a potential rise in leverage within the sector, a trend often associated with the onset of a bull market.<\/p>\n

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DeFi waking up again ✍️ pic.twitter.com\/xrkQqCxGHE<\/p>\n

\u2014 Token Terminal (@tokenterminal) July 31, 2024<\/p>\n<\/blockquote>\n

During the 2021 crypto bull market, active loans in DeFi soared to a peak of $22.2 billion, mirroring the heights reached by Bitcoin and Ethereum, which approached $69,000 and $4,800, respectively. However, this number declined to around $10 billion by March 2022, eventually bottoming out at $3.1 billion in January 2023.<\/p>\n

The total value locked (TVL) in DeFi also experienced a decline last year, plummeting 80% from a November 2021 peak of $180 billion to approximately $37 billion by October 2023. However, according to DefiLlama, the sector has also experienced a resurgence, with TVL increasing by around 160% to roughly $96.5 billion. Notably, DeFi TVL doubled in the first half of 2024, reaching a high of $109 billion in June.<\/p>\n

Currently leading in locked value is the liquid staking protocol Lido, with a TVL of $38.7 billion. Following closely is the staking ecosystem EigenLayer and the Aave protocol, each holding over $11 billion in locked assets.<\/p>\n

Expert Insights<\/h2>\n

Taiki Maeda, the founder of Humble Farmer Academy, has predicted that we might be entering a \u201cDeFi renaissance\u201d after more than four years of underperformance.<\/p>\n

He noted that many \u201cDeFi OGs\u201d are now in the category of \u201chigh float, low fully diluted valuation (FDV)\u201d coins with strong catalysts on the horizon.<\/p>\n

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I believe we are approaching a period of DeFi renaissance after 4+ years of extreme underperformance.<\/p>\n

A lot of these DeFi OGs are now in the category of \u201chigh float, low FDV\u201d coins with strong catalysts on the way.<\/p>\n

Here\u2019s why I believe $AAVE @aave is poised to outperform pic.twitter.com\/gaTZpKOfdg<\/p>\n

\u2014 Taiki Maeda (@TaikiMaeda2) July 29, 2024<\/p>\n<\/blockquote>\n

Maeda gave the DeFi lending platform Aave as an example, which he believes is \u201cpoised to outperform\u201d due to the increasing supply of its native stablecoin GHO and the Aave DAO\u2019s initiatives to lower costs and introduce new revenue streams.<\/p>\n

Meanwhile, despite the recent positive trends, CoinGecko data shows that DeFi assets hold a market capitalization share of just 3.4%. Native tokens for prominent DeFi platforms such as Aave, Curve Finance (CRV), and Uniswap are also still down more than 80% from their all-time highs.<\/p>\n

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