Can the recovery of the total value of DeFi lock-in break again?

TVL data rebounded

Can the recovery of the total value of DeFi lock-in break again?

Since the BTC price withdrew from its high level, the DeFi sector has also suffered heavy losses. However, the practical application of DeFi has given it strong fundamental support. In the past month, the CoinDeskDeFi index has rebounded strongly around 400 twice. If the market stabilizes, it may form a double bottom pattern. The follow-up trend is worthy of attention.

Can the recovery of the total value of DeFi lock-in break again?

TVL and adjusted TVL

TVL refers to the dollar value of all crypto assets managed by DeFi applications. Due to the volatility of the crypto market, TVL often directly reflects changes in prices rather than changes in the DeFi balance sheet. AdjustedTVL refers to the adjusted TVL, which can accurately reflect the balance changes of encrypted assets on DeFi.

As shown in the figure above, TVL has fallen by more than 30% from its historical high of US$154.9 billion, but this indicator has recently rebounded strongly, while the adjusted TVL has not been affected by the market decline some time ago, and the overall trend is still rising. This phenomenon shows that most of the funds have not been withdrawn from the market due to the market crash some time ago, which is a positive sign for the entire crypto market.

DeFi user activity increased and currency prices rebounded

Can the recovery of the total value of DeFi lock-in break again?

DEX daily trading volume

Can the recovery of the total value of DeFi lock-in break again?

The DeFi sector continues to rebound

Although the daily trading volume of decentralized exchanges in the past month has basically stayed below US$2 billion, the DeFi sector has seen a relatively obvious rebound in the recent 7-day gains.

Can the recovery of the total value of DeFi lock-in break again?

This is closely related to the continuous increase in the number of DeFi users. As of July 29, the number of user addresses has risen to 3.1 million, of which about 2.4 million addresses are using Uniswap. On July 29, Uniswap founder Hayden Adams tweeted that Uniswap had contact with a large number of financial companies and technology companies, and many companies interested in learning about DeFi also expressed their willingness to cooperate.

Institutions continue to promote DeFi adoption

Can the recovery of the total value of DeFi lock-in break again?

According to statistics, in the first half of 2021, the global blockchain industry investment and financing market was active, with a total of 770 financings, with a total financing amount of 76.950 billion yuan. From the perspective of the distribution of financing industries, cryptocurrency-related industries are still the key investment areas of the capital side, and over 85% of the industry applications are cryptocurrency-related industries, of which DeFi and NFT are the main investment areas.

The DoveMetrics report shows that 56 European DeFi teams have raised a total of US$282 million, accounting for about 20% of the total global DeFi funds. EURS, a stable currency backed by the euro, has also gained momentum this year, doubling its supply in the past two months to 88.6 million euros (worth about 105 million U.S. dollars). Led by successful cases such as Argent, Aave, Centrifuge and NexusMutuall, Europe is now trying to position itself as an encryption center.

On July 28, PayPal CEO Dan Shulman stated on the second quarter earnings conference call that PayPal is accelerating its focus on cryptocurrency technology and studying how to help shape the next generation of financial systems. According to the minutes of the conference call, Schulman agreed with the long-term goal of allowing encrypted assets to be transferred to third-party wallets. Schulman pointed out that the company will actively dialogue with regulators, the long-term goal is to provide infrastructure for the central bank’s digital currency, but also particularly emphasized the potential technology applications of smart contracts and the DeFi ecosystem.

GalaxyDigital CEO Michael Novogratz also said that traditional banks charge $12 billion in overdraft fees, a large number of ATM fees, and a large amount of checking account fees. However, due to the lack of transparency, banks are prone to mortgage crises. While DeFi has composability and transparency, it only needs to solve the KYC problem to be recognized and adopted by the mainstream.

On July 29, State Street Bank, which manages more than US$40 trillion in assets, announced that it is preparing to provide encryption services to its private clients. The company will become a partner with Lukka Inc., which will provide encryption software for its fund management services and will provide data support for the fund’s valuation services. In early June of this year, State Street Bank established StateStreet Digital, a digital financial department, focusing on cryptocurrency, central bank digital currency, blockchain, DeFi and other fields.

The above signs indicate that with the increasing user base and the promotion of more mainstream institutions, high-quality projects in the DeFi sector are likely to explode again.


Posted by:CoinYuppie,Reprinted with attribution to:
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