The DeFi Market surpasses $50B as Yield-Seeking Speculators Return causing an increase in the locked value and transaction volume.
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Defi Market Surpasses $50B as Yield Speculators Return
A resurgence in Solana-based protocols, accompanied by over $700 million in deposits to Blast, has propelled the growth of locked value in decentralized finance (DeFi).
The total capital staked across all DeFi protocols reached $50 billion on Tuesday, marking a six-month high, driven by a surge in underlying asset values and investor interest in crypto yield opportunities.
Increase in Locked Value
Data from DefiLlama reveals a $15 billion increase in locked value since October 13, when the DeFi sector hit multiyear lows. Last week, Blast, a newly announced layer 2 project set to launch next year, attracted over $700 million in deposits, despite the withdrawal restriction until at least March.
Since October 13, ether (ETH), the primary asset in the DeFi market, has risen by 42%, outpacing the overall 41% increase in the DeFi market. Notably, many DeFi protocols offer yields on stablecoins tied to traditional fiat currencies.
Surge in Transaction Volume
Transaction volume has also surged, with over $5.4 billion traded in a single day last month, the highest since March.
The sector received a boost earlier this year due to Ethereum’s transition to a proof-of-stake blockchain, fostering the growth of the liquid staking market led by Lido and RocketPool, which collectively account for 45% of DeFi’s total locked value.
Lido and RocketPool currently offer annual yields of 3.7% and 3.92%, respectively, in the liquid staking market. Solana-based protocols such as;
- Marginfi
- Jito
- Marinade Finance
have seen TVL increases of 60% to 120% in the past 30 days, reflecting growing institutional interest in Solana. Jito, Solana’s liquid staking protocol, offers a 6.96% yield, attracting $327 million in inflows since October 13. Grayscale Solana Trust traded at an 869% premium last month, highlighting significant institutional demand.
Conclusion
To conclude, the bounce back of the Defi market surpassing $50B after the return of yield-seeking speculators initiated an increase in the TVL and the Defi market asset. The positive momentum in the Defi market creates an investor interest in crypto yield opportunities.
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