Author: Alvis, Mars Finance

4 months ago, Marsbit made a bold prediction: the DeFi track will The turning point may have quietly arrived, and many high-quality projects have ushered in excellent layout opportunities.

Recommended reading: Is DeFi in decline? The value of leading projects has returned

Now, four months have passed, and the DeFi market has used eye-catching data to prove the accuracy of this conclusion. Whether it is key indicators such as token performance, total value locked (TVL), or loan volume, they all show strong recovery momentum.

All this shows that this field, which was once considered "continuously falling", is gradually rising from the trough and laying a more solid economic foundation and innovation. path.

DeFi market capitalization table, data comes from CoinGecko p>

Looking back on this period, the DeFi market value has rapidly climbed from US$70.5 billion to US$132.4 billion, with the average token increase reaching 87%, significantly leading the overall cryptocurrency market by 67% average increase. This not only reflects DeFi’s outstanding performance in the market recovery, but also highlights its huge potential in future outbreaks.

DeFi tokens performed well: the average increase was over 110%

DeFi Pulse Index , derived from Messari

Index Coop's DeFi Pulse Index (DPI) is a tokenized index used to track the Ethereum blockchain Top decentralized finance available on (DeFi) asset performance. DPI provides diversified investments in the DeFi field through a single token, simplifying the investment process for users. It includes assets such as Uniswap, Aave, and MakerDAO, representing a wide range of DeFi projects.

Bitcoin hit all-time highs in December, butWhat we can find is that most DeFi tokens have performed far ahead of BTC and ETH recently.

The DeFi Pulse Index (DPI) has risen rapidly in the past month or so. As of press time, it has exceeded the peak level in March this year.

This means that the prices of most DeFi tokens have reached new highs, with investors achieving average gains of over 110%.

TVL growth: the core indicator of market recovery

The total TVl of multi-chain DeFi, Data comes from DeFiLlama

As of December 6, 2024, the total locked value (TVL) of multi-chain DeFi is US$134.6 billion, which is higher than 8 month The level of US$84.6 billion has increased by more than 59%. Although this figure is still 38% higher than the historical peak of US$186.8 billion set in December 2021, it has shown a clear upward trend at this time, which can be partly attributed to the A general increase in consolidation, with encapsulated assets such as Ethereum and Bitcoin hitting new highs, and externally positive crypto also contributed to this upward trend.

Recovery of lending volume: Leverage demand stimulates market vitality

Ethereum’s main lending Agreement, data sourced from Token Terminal

Lending volume - a measure of the value of outstanding debt in lending agreements - currently stands at $18.8 billion. This is already close to the peak levels of $20 billion in March and November 2021. The rising demand for loan leverage directly caused the prosperity of the DeFi ecosystem.

DEX trading volume explodes: the dominance of decentralized exchanges

All Total Dex trading volume, data comes from DeFiLlama

DEX trading volume has surged in recent months, with trading volume reaching $372.3 billion last month , has exceededPast the November 2021 peak of $292 billion. The current transaction volume in December has reached 101 billion U.S. dollars, and it is expected to reach more than 400 billion U.S. dollars this month, setting a new high.

Dex trading volume ranking, data comes from DeFiLlama

Among them, Uniswap, Raydium, and Pancakeswap rank among the top three in terms of 24-hour transaction volume at 6.1 billion, 2.1 billion, and 1.8 billion U.S. dollars respectively, representing Ethereum respectively. , Solana and BNB Eco’s Dex faucet. This can be seen at a glance from the token prices. The price of Uni has increased from US$6.5 to US$16.2, the price of Ray has increased from US$1.3 to US$5 in the past 3 months, and the price of Cake has increased from US$1.5 to US$4.1.

With trading activity and price appreciation highly correlated, along with the liquidity brought by ETF funding, this upward trend is likely to continue into March next year.

Expansion of the stablecoin market: Stablecoins have become the core of market liquidity

Stable Coin ranking, data comes from DeFiLlama

The current market value of stablecoins is US$196.8 billion, an increase of 16% from the previous US$169 billion, setting a record high .

It is worth noting that the current market value of USDe has exceeded US$5 billion, surpassing DAI to become the third largest stablecoin by market value, and it is also the largest decentralized stablecoin by market value. . Its governance token ENA has risen from US$0.2 to the current US$1.1 in the past three months.

Stablecoins have gained widespread attention and applications around the world, and have gradually expanded from the narrow scenario of cryptocurrency transactions to an important choice for global payments.

At the same time, altcoin trading volume growth has been driven primarily by stablecoin and fiat trading pairs, rather than traditional Bitcoin trading pairs, indicating that the market is experiencing real growth rather than simple asset rotation. Stablecoin Liquidity Better ExplainedThe current surge in the altcoin market.

Institutional financing picks up: DeFi market maturity increases

DeFi track financing over the years Forehead. Originating from ROOTDATA

Venture capital funding in the DeFi space is experiencing a remarkable renaissance.

According to the latest data from Rootdata, total investment in the DeFi field has climbed to $1.48 billion this year. Although this number has not yet reached the glorious peak of US$2.2 billion in 2021, it has clearly gotten rid of the trough in 2023 and is approaching the level of 2022.

The innovation and future prospects of DeFi's leading projects

In the DeFi track, the top projects (the top five DeFi projects according to CoinGecko’s market value) are such as Aave, Uniswap, Chainlink, Hyperliquid, Ethena, etc. are all constantly innovating and expanding their business boundaries, demonstrating strong vitality and market competitiveness.

ChainLink, the leading oracle machine

Chainlink token Link, originated from CoinGecko

Benefiting from RWA's narrative, Chainlink's token Link has risen from US$10 to US$24 in the past three months.

Chainlink's LINK token, which is mainly used to pay for the verification services of data retrieval nodes, and apart from this, the token itself does not provide much utility. While some argue that Chainlink as a business can continue to thrive without the LINK token, this logic runs into problems with tokens based on real world assets (RWA), as these tokens tend to automatically become revenue Assets, this situation may attract the attention of regulators, especially the SEC.

The reason why Chainlink is the leader in the oracle track is mainly due to its decentralized network design, strong security andExtensive ecological integration. As a decentralized oracle network, Chainlink provides reliable and diverse data sources by connecting multiple independent nodes, avoiding the risk of single points of failure. It cooperates with multiple blockchain platforms and traditional financial institutions (such as Google Cloud, Oracle, etc.) to support cross-chain compatibility and expand the application scenarios of smart contracts.

In addition, Chainlink uses incentive mechanisms and pledge mechanisms to ensure the accuracy and security of data, while constantly innovating technologies, such as off-chain computing and privacy protection solutions, Further enhance the functionality of smart contracts. Leveraging its technological advantages, extensive partners, and strong community support, Chainlink is firmly positioned as a leader in the oracle field.

Possible drivers for LINK include:

Key developments and updates in the Chainlink ecosystem , such as the upcoming Staking v0.2 platform;

Five Chainlink services are integrated into seven different chains, including Base and Arbitrum;

With Cooperate with financial entities such as SWIFT to use Chainlink’s Cross-Chain Interoperability Protocol (CCIP) to conduct numerous cooperation in asset tokenization and cross-chain interoperability;

RWA field The proliferation of TVL and the hype surrounding this narrative.

Dex leader Uniswap

Uniswap trading volume and Revenue, derived from DeFiLlama

Since the launch of the V2 version in May 2020, Uniswap’s market share in the field of decentralized trading has experienced fluctuations . It hit a market share peak of nearly 78.4% in August 2020, but then fell to a low of 36.8% in November 2021 as DEX competition intensified. However, Uniswap not only managed to regain momentum but also proved its resilience and ability to recover with a market share of nearly 70%. At the same time, Uniswap also hit an average monthly transaction volume of 9An all-time high of $4.4 billion.

As a leading automated market maker (AMM) protocol, Uniswap V4’s liquidity pool update once again demonstrates its innovation and innovation in the field of decentralized trading protocols. leadership position. This series of improvements has enhanced the flexibility and scalability of the protocol, significantly improved its market competitiveness, made Uniswap V4 ahead of its competitors in many aspects, and continued to consolidate its dominant position in the DeFi ecosystem.

Derivatives trading Hyperliquid

Hyperliquid token HYPE, originated from CoinGecko

In the cryptocurrency space, many projects rely on hype and trading volume subsidies to attract attention, but Hyperliquid is different. It did not do publicity or accept venture capital financing, relying entirely on its strong product strength to surpass its competitors. Hyperliquid is a decentralized perpetual contract exchange that also has a rapidly growing spot market and actively promotes meme culture. By developing an L1 public chain optimized for high-frequency transactions, the team intends to solve the performance bottlenecks of the current L1 and L2 public chains. The design of the on-chain order book ensures the openness and transparency of transactions and avoids the "front-running" and information advantage problems of traditional centralized exchanges. Hyperliquid’s goal is not just to trade contracts, but to build a complete on-chain financial ecosystem, promote innovation in the DeFi field, and further expand to efficient decentralized options markets.

In addition to its powerful technology and products, Hyperliquid has also received support from the community. Many users use "xxx.hl" as their username to express their trust and trust in the platform. support. As for how to capture value before Hyperliquid releases its currency, investors can choose to buy its iconic meme currency "purr", inject HLP or purchase Hyperliquid Points. Since Hyperliquid has no venture capital support and is highly profitable, they have enough room to increase the airdrop ratio of points, and it is expected that at least 15% of the tokens will be used for airdrops. As a trader and DeFi enthusiast, I have full confidence in Hyperliquid and believe now is the perfect time to participate in its growth.

OKX is currently online with Hyperliquid (HYPE) pre-market trading, quoted at US$14, and may be listed on more exchanges in the future.

Lending leader AAVE

AAVE TVL and income, derived from DeFiLlama

Aave is one of the oldest Defi projects. After completing financing in 2017, it completed peer-to-peer lending (the project was still called Lend) transformed into a peer-to-peer lending model, and surpassed the leading project Compound in the same track during the last bull market cycle. Currently, it ranks first in the lending track in terms of market share and market value.

TVL exceeds $21.6 billion. Aave's revenue has exceeded the peak of the previous bull market for half a year in a row, with strong profitability.

At the time of writing, the price of AAVE token exceeded 257 US dollars, with an increase of more than 83% in the past 3 months, setting a new high in 2 years

Go Ethena, the leading centralized stablecoin

Ethena token ENA, originated from CoinGecko

In the past month, the total issuance of USDe increased from US$2.4 billion to US$5 billion, achieving a monthly growth of over 110%. USDE also surpassed DAI in one fell swoop to become the decentralized stablecoin with the largest market capitalization.

Ethena protocol annual rate, derived from Ethena official website

The underlying logic of Ethena is that after BTC broke through new highs, the long sentiment was strong, and the increase in funding rates increased USDe’s pledge yield and brought USDe growth. Although it has declined from previous days, the APY shown on Ethena’s official website on December 6 was about 40%.

In this growth spiral, almost everyone involvedEveryone is the beneficiary, and USDE’s leveraged miners/lenders can obtain extremely high but variable rates of return through leverage.

Future Outlook: Deep integration and institutional development of the DeFi ecosystem

Looking to the future, the DeFi market will continue to deepen its development in the following aspects:

Institutional development: As more and more traditional financial institutions enter the DeFi field, institutional investment will become an important driving force in the DeFi market, bringing more funds and technical support.

Cross-chain and interoperability: The maturity of cross-chain technology will further promote the popularity of DeFi applications, especially with the help of oracles such as Chainlink, DeFi will Achieve broader cross-chain collaboration and data sharing.

Compliance and supervision: As the regulatory framework gradually improves, the DeFi market will gradually adapt to stricter compliance requirements, which will contribute to the long-term health of the market. Pave the way for development.

User experience optimization: The DeFi platform will attract more non-technical users to participate in this ecosystem and promote the development of DeFi by continuously optimizing user experience and lowering entry barriers. universal.

In summary, although DeFi faces some fluctuations in the short term, judging from market data, DeFi’s recovery momentum is already very obvious. With the continuous innovation of core projects, the increase of institutional investment and the gradual support of , the DeFi ecosystem will show broader development prospects in the next few years.