According to data from DeFi Llama, a data company that tracks Decentralized Finance (DeFi) information on multiple blockchains, reveals that the Total Value Locked (TVL) on DeFi platform hit a new All-Time High (ATH), as Bitcoin and other altcoins rally.
Many analysts believe TVL is one of the best measures of sentiment within the DeFi ecosystem. With the TVL hitting a new ATH, it suggests that more cryptocurrency investors are unwillingly to sell their positions and are putting their money to work for them through staking or farming pools. It also indicates that DeFi is becoming more mainstream as an option to invest your cryptocurrency while you hold.
During the last bull run before the May 2021 crash, where Bitcoin and Ethereum hit record highs, the TVL reached an all-time high, coinciding with the surging prices of the two coins. Now, with Bitcoin and Ethereum below their ATH’s by 27% and 28% respectively, the TVL has still managed to exceed its previous high, an indication that popular DeFi-related tokens with multiple use cases within the crypto and DeFi ecosystem have attracted investors’ attention.
Typically, Uniswap (UNI) leads DeFi tokens, being ranked #11 with a market capitalization of $16 billion but a few other strong gainers this month includes a 125% increase for Convex Finance’s native token CVX and a 74% increase from PancakeSwap’s native token CAKE.
In the past 3 months, there has also been the arrival of popular new DeFi protocols that have brought fresh energy and funds to the DeFi ecosystem. Examples include DinoSwap, which in the earlier part of the month hit a TVL of over $500 million; Shiba Inu Swap, the “not so meme coin” that launched its swap site and achieved a TVL nearing $2 billion in July; and the rise of Ethereum-network competitors like Avalanche (AVAX), whose native token appreciated over 275% in the last month.
DinoSwap and Avalanche have been able to attract existing DeFi investors who are fleeing the high gas fees (transaction fees) on the Ethereum network because both offer significantly low transaction costs and faster processing times through their cross-chain bridges. Avalanche, in particular, launched its ‘Avalanche Rush’ DeFi incentive program last week, which has brought a flurry of activity to the protocols involved, including Aave, Curve and SushiSwap. This pushed the platform’s native AVAX token back above $50 for the first time since February.
TVL has appreciated over 46% in the last month from $107.57 billion as of July 26 to currently stand at a new ATH of $157.06 billion.