The DeFi bulls are back into motion as the overall total value locked (TVL) of DeFi projects surges up to all time highs. This is following six weeks of cooling-down for much of DeFi trading volume.
All Time High Defi TVL and Liquidity
DeFi Pulse has recorded an all-time height of $12.3 billion for total value locked. The number of tokens locked include all DeFi protocols existing on ETH and stable coins such as USDC and USDT.
Uniswap has also increased its liquidity — the capital used by its customers to facilitate token swaps (and earnings fees)—from about $1 billion in mid-September to around $3 billion today.
While total value locked has never been higher, many DeFi coins have faced downtrends in terms of price. Volume on decentralized exchanges has also dried up recently.
At the start of the DeFi craze, DEX boomed in popularity; users spent billions of dollars on DeFi lending protocols. Users benefited greatly from markets in June, often up 1000 percent on their returns.
TVL Increases as DEX Volume Falls
However, the craze slowed downit: protocols gave more rewards to entice users to use protocols. Eventually, inflation took hold, especially for protocols promising 1000% APY or higher. Many users would exit when protocols ran out of rewards.
This may mean traders have cooled off on speculating on DeFi tokens but are still interested in producing yield with protocols that have “reasonable” APYs. Protocols with astronomical APYs slowly disappeared while the ones with low APYs have stayed around.
