The decentralized finance (DeFi) ecosystem has witnessed a remarkable resurgence, with the total value locked (TVL) soaring to an impressive $100 billion in the first quarter of 2024. This surge can be largely attributed to the rising popularity of Ethereum liquid restaking initiatives, spearheaded by protocols such as Lido and EigenLayer.
According to research, the DeFi TVL nearly doubled in the first three months of this year compared to the previous quarter. DefiLlama data reveals that the TVL surged from a low of $36 billion in Q4 2023 to peak at almost $97 billion in Q1 2024, marking an 81% increase to a two-year high of $98 billion last week.
Messari’s report on April 18 further corroborated this growth, noting that DeFi collateral increased by 65.6% quarter-on-quarter to reach $101 billion. The research firm attributed this surge primarily to the appreciation of underlying asset prices and the growing adoption of liquid restaking.
Liquid restaking protocols have played a pivotal role in driving this DeFi renaissance. Lido, the leading Ethereum liquid staking protocol, currently holds a 62% market share of the liquid staking ecosystem and has been instrumental in facilitating the growth of Ether’s TVL, which increased by nearly 71% during the quarter.
Moreover, the popularity of liquid restaking protocols like EigenLayer has skyrocketed. EigenLayer, which allows Ether to be staked more than once for additional yields, witnessed a staggering 990% increase in TVL during the first three months of 2024, ending the quarter with $12 billion locked in the protocol.
QuickNode, a Web3 infrastructure and developer platform, and Artemis, an institutional crypto data platform, echoed these findings in their joint report, stating, “Staking, liquid staking, restaking, and liquid restaking have all been catalysts of DeFi’s recent explosive growth, explaining why staking now represents a large portion of DeFi’s TVL.”
Despite the recent crypto market retreat, which has led to an 11% decline in DeFi TVL to $86.6 billion at the time of writing, the industry remains optimistic about the prospects of a “second DeFi Summer.” QuickNode noted a substantial 291% quarter-on-quarter rise in user activity, fueling hopes for continued growth and transformative shifts within the DeFi landscape.
