The DeFi landscape has evolved in recent years, with the balance of the most commonly used chains shifting. A trend has formed where Ethereum (ETH) is still the leader in terms of notional value, but has a smaller share of the DeFi market as a whole.
The DeFi market has been shifting as Ethereum (ETH) has been joined by several other chains with successful financial apps.
At the end of 2023, Ethereum’s influence over the entire DeFi sector was 72.2%. The total value locked (TVL) in DeFi reached $109 billion, still impacted by the bear market. Over the past twelve months, the total locked value has been between $125 billion and until $275 billiondepending on the reporting method.
DeFi has been actively adding new chains in 2024
The BNB chain remained a quiet part of the DeFi space, with an unchanged 4.5% market share, the same as at the end of 2024. Solana achieved slight growth, from 3.6% at the end of last year to 6.7% of the market in late 2024. Solana’s bid for DeFi success came from DEX activity, as well as the attempt to create an indigenous form of liquid staking and liquid re-staking. Solana increased the number of transactions and the value was locked based on the increased DEX traffic from exchanging meme tokens.
The other big shift in 2024 is the rise of the Bitcoin-based DeFi sector. Currently, up to 5.6% of all value is locked in BTC-based DeFi. Babylon Labs has the largest share, with $5.59 billion of its own investments in BTC. The current form of Bitcoin-based DeFi failed to take off with the proposed L2 projects, which ultimately delivered almost no value. The appeal of Babylon Labs lies in the ability to unlock BTC at any time, without the need for bridging.
TRON is the other big shift in DeFi. The chain first appeared as a DeFi hub in 2022 and currently has a 6% market share. TRON peaked at 6.5% of the DeFi market at the end of 2023, with a 6.5% share. The TRON ecosystem grew based on crypto-collateralized loans, in addition to $60 billion in stablecoin liquidity.
Arbitrum was one of the go-to chains during the 2022-2023 bear market, but did not graduate to a major chain. It became part of the mix of small chains with early-stage DeFi. The big change in 2024 affected smaller chains, which make up an estimated 21.6% of the total DeFi value. Just a year ago, small chains made up 10.4% of locked DeFi value.
Base, Sui and Aptos emerged as alternatives to Ethereum, offering low costs and innovation. In the last days of 2024, Hyperliquid was trending, after launching its own HYPE token. The new high-speed chains focus on trading opportunities and gaining liquidity with targeted high-activity pairs.
Ethereum still leads DeFi with its side influence
Ethereum (ETH) is still worth over $70 billion because it is used as collateral. ETH linked to Binance Smart Chain also drives the value of DeFi.
DeFi on Ethereum is of high value due to the model of most apps, which require large-scale collateral or some other form of locking ETH. LidoDAO’s liquid staking built the largest ETH reserve. Aave (AAVE) rose to second place after becoming the leading credit protocol in 2024.
Ethereum-based DeFi remains a strong proposition as expectations remain for an ETH rally to higher ranges. The new year is typically a historically strong period for ETH, potentially driving up its value across all DeFi apps.
ETH held its value at $3,494.45, with strong support at $3,400. For now, the DeFi sector is safe as most of the collateral has been posted at a much lower price range.
The other reason for the growth of Ethereum-based DeFi is the influx of Tether (USDT) as an ERC-20 token. The supply of ERC-20 USDT expanded to 79.92 billion tokens, with some of the TRON-based and niche chain versions being swapped out due to demand for liquidity.
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