A recent report from Binance indicates that decentralized finance (DeFi) activity has increased by 72% to $94.1 billion in the first half of the year.
The DeFi space saw inflows in the first six months of the year, with total value locked (TVL) jumping to $94.1 billion, a 72.8% increase.
Almost all sectors of the digital asset market are experiencing this growth as sentiments continue to rise.
The approval of spot Bitcoin ETFs has resulted in substantial institutional inflows into the crypto market.
DeFi Activity Spikes
Decentralized finance has experienced an increase in volume this year as the broader market experienced growth.
A recent market update by cryptocurrency exchange Binance reports that TVL has increased from $54.4 billion to $94.1 billion.
This represents a 72% increase in the last six months.
“This growth has benefited almost all areas in DeFi, including mainstream and niche markets, promoting the emergence of various protocols and providing on-chain access channels for previously inaccessible financial primitives… The Web3 gaming sector had a strong first quarter, but in the second quarter, the market capitalization of game project tokens and other altcoin markets fell sharply.”
The market as a whole experienced a 37% year-to-date (YTD) increase, climbing to a market capitalization of $2.27 trillion.
The market cap increased by 60% from 2023 to over $2.5 trillion in Q1 2024, as investors regained interest.
The report indicates that the last six months have been an airdrop season in layer 2 chains.
In particular, the TVL increased by 90% to $43 billion as a result of incentivized programs.
Stablecoins also experienced a similar trajectory, remaining 14% below their 2022 apex before Terra’s collapse.
However, non-fungible tokens (NFTs) continue to be volatile due to a decline in sales.
Institutional Investors Stimulate Growth
The activities of centralized market participants in the crypto market have increased prices and activity of crypto assets and DeFi, respectively.
The United States Securities and Exchange Commission’s approval of spot Bitcoin exchange-traded funds (ETFs) has opened up a new investment opportunity for traditional players to increase their exposure to Bitcoin.
The price of Bitcoin reached an all-time high of over $73,000 as a result of the influx of billions and the anticipated favorable upticks, before experiencing a correction.
Bitcoin is currently trading at $67,235, representing a 6.5% increase over the past seven days.