Total value locked (TVL) in Decentralized finance is almost 2X in the first quarter of 2024, as compared to the last quarter of the previous year, partially driven by Ethereum liquid restaking initiatives, as per recent research.
DeFi total locked value increased from Q4 of last year, which was $36 billion, to $97 billion in the first three months of 2024, according to DeFiLIama. The beginning of this year broke the record of the past two years by giving a rise of 81% last week.
A report presented by Messari showed a large figure of TLV on April 18, showing DeFi collateral surge by 65.6% quarter to quarter to reach $101 Billion.
It credited this growth to the increasing prices of the existing assets and liquid restaking.
“This uptick was primarily driven by asset price appreciation and liquid restaking, led by Ethereum’s TVL growth of nearly 71%.”
DeFi TVL between Q4 2023 and Q1 2024 Source: DeFiLIama
Liquid Staking’s Impact and Transformative Shifts
The recent growth in DeFi is a composition of liquid staking, liquid staking, and staking,” it stated before adding that this “explains why staking now represents a large portion of DeFi’s TVL.”
Liquid staking gives an all-time high growth of $63 billion on March 13. The drop in Ether (ETH) prices to $3,108 and the dominance of the liquid staking protocol Lido, which currently holds a 62% market share of the liquid staking ecosystem, as reported by DefiLlama, primarily drive this growth.
EigenLayer, a liquid staking protocol, became popular during these months, by giving a 990% surge in the first quarter, closing it with a total TVL of $12 billion. This layer allows ETH to stake more than one time for additional layers.
Liquid staking graph for Q4 2023–Q1 2024 Source: DeFiLIama
A notable increase in user activity. at a 291% quarter-on-quarter rise, which “has roused hopes of a second ‘DeFi Summer’ as there are signals for growth and a transformative shift despite the SEC’s best efforts.”
DeFi TVL dropped by 11% due to market volatility.
