Maker, the decentralized lending platform that issues the DAI stablecoin, has emerged as the leader of the DeFi (decentralized finance) space, with a total value locked (TVL) of over $95 million, according to data from DeFiLlama, a DeFi analytics dashboard.
TVL is a metric that measures the amount of assets that are locked in smart contracts of DeFi protocols, and is often used as an indicator of the popularity and growth of the sector. DeFi protocols allow users to access various financial services, such as lending, borrowing, trading, and investing, without intermediaries or centralized control, by leveraging blockchain technology and smart contracts.
DAI High Demand Drived Maker's TVL
According to Blockworks, a financial media brand that covers digital assets, Maker's TVL has increased by more than 50% since the beginning of 2023, driven by the high demand for DAI, a stablecoin that is pegged to the US dollar and backed by various crypto assets. Maker allows users to mint DAI by locking up their crypto collateral, such as ETH, WBTC, or USDC, in a smart contract called a vault. Users can then use DAI for various purposes, such as paying for goods and services, trading on decentralized exchanges, or earning interest on lending platforms.
Lido's TVL Grows By 40%
Maker is followed by Lido, a decentralized staking protocol that allows users to stake their ETH and receive stETH, a token that represents their staked ETH and the rewards they earn. Lido's TVL is over $55 million, and has grown by more than 40% since the beginning of 2023, as more users seek to participate in Ethereum's transition to a proof-of-stake (PoS) consensus mechanism, which is expected to improve the network's scalability, security, and sustainability.
Pancakeswap Grew By 30%
The third-largest DeFi protocol is PancakeSwap, a decentralized exchange that runs on the Binance Smart Chain, a blockchain network that offers fast and low-cost transactions. PancakeSwap's TVL is over $52 million, and has increased by more than 30% since the beginning of 2023, as more users flock to the platform to swap, farm, and stake various tokens, especially those related to the booming NFT (non-fungible token) and gaming sectors.
Convex Finance's Yield Farming Boom
The fourth-largest DeFi protocol is Convex Finance, a platform that optimizes the yield farming experience on Curve, a decentralized exchange that specializes in stablecoins and low-slippage swaps. Convex Finance's TVL is over $42 million, and has risen by more than 20% since the beginning of 2023, as more users leverage the platform to boost their returns and rewards on Curve.
GMX's Perpetual Contract Saw Increase
The fifth-largest DeFi protocol is GMX, a decentralized perpetual contract platform that allows users to trade various crypto assets with up to 30x leverage, without any fees or funding rates. GMX's TVL is over $37 million, and has surged by more than 100% since the beginning of 2023, as more users take advantage of the platform's innovative features, such as cross-margin, zero-slippage, and gasless trading.
The top five DeFi protocols account for more than 50% of the total DeFi TVL, which is over $180 million, according to DeFiLlama. The DeFi sector has witnessed remarkable growth and innovation in 2023, despite the challenges and uncertainties posed by the COVID-19 pandemic, the regulatory environment, and the market volatility. DeFi protocols have attracted millions of users and billions of dollars, offering new opportunities and possibilities for the future of finance.
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