By the End of 2023, DeFi Industry TVL Exceeds the 50B Mark

According to information from DefiLlama, the Total Value Locked (TVL) of all DeFi projects just recorded a new record for 2023 of $53 billion – a threshold not seen since the collapse of FTX in November 2022.

Specifically, from a TVL of 28 billion USD at the beginning of the year, the DeFi industry’s peanut value has increased by 36%, reaching 53 billion USD by the end of 2023. However, this number has still not reached 1/3 of the level 165 billion USD in April 2022, before LUNA-UST crashed the cryptocurrency market.

DeFi TVL volatility chart from mid-2022 to late 2023. Source: DefiLlama (December 31, 2023)

Notably, DeFi’s TVL had the strongest recovery in the last 3 months of the year, at the same time the cryptocurrency market increased strongly thanks to the momentum from the Bitcoin ETF.

In addition, the outstanding developments of many protocols in 2023 are also seen as the reason why DeFi quickly regained its lost position.

Especially MakerDAO with its Real World Asset (RWA) strategy, converting 2.5 billion assets backing stablecoin DAI to US Treasury bonds to stimulate investment. Maker also launched Spark Protocol, a lending protocol to create liquidity. Thanks to these changes, Maker became the DeFi project with the largest revenue in the past year.

Similarly, Lido Finance also stands out with the Liquid Staking trend after Ethereum’s Shanghai upgrade in April 2023, currently accounting for 1/3 of the total ETH staked. Lido is currently the DeFi protocol with the largest TVL with over 21 billion USD in locked assets.

Top 13 DeFi projects with the largest TVL. Source: DefiLlama (December 31, 2023)

Leading DEX Uniswap has announced version v4, bringing many improvements to the trading process and anti-MEV features.

However, there are still risks that threaten the stability of the DeFi sector in the past year, especially the attack on Curve Finance and the disclosure of the founder’s borrowing position, plus a series of lawsuits. Hacking caused hundreds of millions of dollars in damage.