The volume of funds locked up in various DeFi-protocols has increased markedly over the past two weeks. This means that the bearish trend is losing momentum.
Vendors are gradually withdrawing from the crypto market, increasing capital inflows into decentralised finance (DeFi).
Various services that analyse the state of the DeFi industry have noted that the amount of funds locked up in protocols has been rising steadily over the past few weeks.
According to DeFillama, TVL has increased by 20% since the end of June: from $92bn to $111bn.
DappRadar recorded a 16% increase in TVL to $88bn, while DeFiPulse, which tracks far fewer protocols, saw a 12% increase to $54bn. GoinGecko TVL data shows a 24% increase since 27 June.
DeFi is recovering
According to BSCproject, TVL in Binance Smart Chain-based protocols has also grown from $17.1bn on June 28 to $19.5bn at the time of writing. This 14% increase is in line with the overall momentum in the DeFi segment. This means that BSC is no longer growing ahead of the market.
Market participants prefer not to sell their assets but to invest them in DeFi projects, which is why the amount of blocked funds in these protocols is growing. For the last two months, the overall capitalisation of the crypto market has barely changed. The figure has fluctuated between $1.5 trillion and $1.7 trillion.
The industry leader in terms of blocked funds is difficult to isolate, as the three data providers give different results. DeFiLlama puts Curve Finance in first place with $9.3 billion in blocked funds, DappRadar thinks Uniswap ($8.3 billion) is the best, and DeFiPulse favours Aave with a TVL of $10.5 billion.
Industry experts also noted that the number of DeFi users has reached 3 million. However, according to Alex Krueger, there are actually far fewer people using DeFi services, as one person can have multiple addresses.
“I believe the real number is somewhere in the range of 1.2 million to 800,000,”said the expert.
Bitcoins flowing out of exchanges
Capital flight from cryptocurrency exchanges is fuelling the growth of TVL in the decentralised finance segment. When investors or traders get ready to sell coins, they wind up on cryptocurrency exchanges. This was the case in April and May.
But during the consolidation phase, they withdraw the money back to cold wallets for long-term storage. The latest Glassnode report confirms this.