Monday, November 25, 2024

DeFi Wrap for 2023: 
Time For Bears to Go Into Hibernation

DeFi TVL and variety of protocols at scale grew this yr, signaling the ecosystem’s elevated maturity.

As we glance again throughout 2023, we see a DeFi panorama that has undergone a change, shaking off a tough prior yr and a lingering bear market.

This retrospective delves into key facets of the house, encapsulating the developments, challenges, and triumphs that formed a yr marked by important milestones and intriguing developments.

2023 DeFi TVL

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Complete DeFi TVL grew 110%, with Mainnet TVL reaching $46.768 billion. TVL for the primary Layer-2 chains (Optimism, Arbitrum, Base) was $3.30 billion. (Information supply: Defi Llama)

In 2023, the Complete Worth Locked (TVL) in DeFi skilled important development, significantly on Ethereum, which stays DeFi’s major blockchain. This surge in TVL might be attributed to the continued adoption of DeFi protocols and the growth of the ecosystem.

The surge in TVL for Layer-2 options continued by the yr, aided by the arrival of Base in August. These Layer-2 options contribute to assuaging congestion on Ethereum, by processing transactions off-chain and settling them on the Ethereum mainnet. They provide sooner and cheaper transactions, additional enhancing DeFi’s total scalability.

2023 DeFi Lending Markets

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The three lending market giants (Aave, Maker, Compound) continued to carry out properly. Aave strengthened its place as customers migrated from v2 to v3. New entrant Spark loved a momentous first few months. (Information supply: Defi Llama)

In 2023, the DeFi lending market witnessed some notable developments amongst main gamers and the emergence of latest protocols. The panorama demonstrated ongoing innovation, regulatory concerns, and elevated adoption. The migration to Layer-2 options and the introduction of latest lending protocols added additional variety to the market.