DeFi Market Surges to $153 Billion

The decentralized finance (DeFi) market ballooned to a three-year high of $153 billion on Monday, spurred by ETH’s ascent toward $4,000 and significant inflows into restaking protocols.

DefiLlama data shows that the uptick in inflows and asset prices over the past week lifted the sector above its December 2024 high, marking its highest point since May 2022, during the $60 billion collapse of Do Kwon’s Terra network.

Market Overview

ETH has risen 60% from $2,423 to $3,887 over the past 30 days, following a wave of institutional investment, including a $1.3 billion treasury investment from Sharplink Gaming and BitMine’s $2 billion acquisition.

Ethereum still commands the monopoly over DeFi total value locked (TVL) with 59.5% of all capital locked on-chain, largely attributed to liquid staking protocol Lido and lending platform Aave, both holding between $32 billion and $34 billion in TVL.

The Yield Farming Battle

Institutions acquiring assets like ether is one part of the equation; the other is securing a yield on that investment.

Investors can stake ETH directly and earn an annual yield between 1.5% and 4%, or use a restaking protocol to earn native yield with a liquid staking token that can be used elsewhere across the DeFi ecosystem for additional yield.

X user OlimpioCrypto revealed a strategy that can yield up to 25% annually on USDC and sUSDC with low risk and full liquidity. This involves looping assets between Euler and Spark on Unichain: users supply USDC on Euler, borrow sUSDC, re-supply, and repeat. Incentives from Spark (SSR + OP rewards) and Euler (USDC subsidies, rEUL) boost returns.

An easier but less profitable alternative starts by minting sUSDC via Spark and looping with USDC borrow/lend on Euler. Both methods reportedly yield strong returns, likely lasting about a week unless incentives change.

Solana and Other Blockchains

While attention is predominantly on the Ethereum Network, Solana’s TVL has grown by 23% in the past month to $12 billion, with protocols like Sanctum, Jupiter, and Marinade outpacing the wider SOL ecosystem with significant inflows, according to DefiLlama.

Investors have also been pouring capital into Avalanche and Sui, both up 33% and 39% respectively in terms of TVL this month. The Bitcoin DeFi ecosystem has seen more muted growth, rising by only 9% to $6.2 billion despite a recent drive to new record highs at $124,000.