Decentralized finance (DeFi) protocols experienced a boom in total value locked across different staking pools in January. The market hit $74.6 billion worth of staked assets, increasing by 26% from December.
In its latest monthly report, DappRar outlined the growth of the DeFi sector alongside rejuvenated nonfungible token (NFT) markets that have also h upticks in tring volume and sales.
Optimism emerges as the top DeFi performer, seeing a 57.44% increase in total value locked (TVL) at $808 million. Blockchain Analyst Sara Gherghelas told Cointelegraph that Optimism’s transaction volumes were likely driven by a “learn-to-earn” incentives program that ended midway through January.
A sudden drop in daily transactions on Jan. 17 suggests that educational incentive programs might play a role in driving DeFi option and onboarding, as Gherghelas explained:
“By providing a hands-on learning experience, these incentives can help users gain a deeper understanding of DeFi technologies and the potential benefits they offer, thereby driving greater option and usage of DeFi products and services.”
Solana saw a 57% increase in its TVL to reach $548 million, driven by Marine Finance’s introduction of a token incentive scheme rewarding SOL depositors with liquid staking derivative mSOL. The protocol reached $152 million TVL between December and January.
It’s not all positive for the Solana ecosystem, though, with platform Everlend announcing its closure on Feb. 1, citing a lack of liquidity for shutting down its service.
Related: NFT sales topped 101 million in 2022: DappRar report
Ethereum’s upcoming Shanghai upgre is also driving staking in DeFi due to the expected opening of withdrawals from Ethereum staking contracts. Lido Finance flipped Maker DAO as the largest DeFi protocol in January, driven by the popularity of liquid staking derivative protocols.
According to Gherghelas, Lido’s liquid staking solutions have proven to be a major drawcard for users looking to maximize staking returns.
“What sets Lido apart from other DeFi protocols is its innovative staking solution, which allows users to access liquid Ether staking without committing to the tritional 32 ETH minimum.”
Lido saw over $8 billion worth of value staked in its platform, an increase of over 36% since December 2022. Gherghelas highlighted the recent rally in cryptocurrency markets contributing to the increase in DeFi’s TVL:
“The crypto market has been bullish, leing to an increase in investor confidence and an inflow of capital into the DeFi space.”
NFTs have also enjoyed a resurgent start to the year. Tring volume reached $946 million, marking a 38% increase month on month and the highest tring volume seen since June 2022.
Ethereum still dominates the NFT market, accounting for 78.5% of total tring volume at a value of $659 million in January. Yuga Labs enjoyed a good month, with $324 million in tring volume from its exclusive collections.
NFT collections DeGods and Monkey Kingdom helped drive a 23% increase in Solana’s NFT tring volume. Meanwhile, Polygon saw a significant 124% jump in its NFT tring volume and a total of 4.5 million NFT sales, driven in part by the Collect Donald Trump Cards.
As Cointelegraph explored at the end of 2022, unique active wallet data comparing 2022 to 2021 showed a 50% increase, with DeFi, NFTs and blockchain gaming-driven activity and tring volumes.
META ARTICLE: DeFi enjoys prolific start to 2023: DappRar report PUBLISHED: 2023-02-02 18:00:00 SOURCE: https://cointelegraph.com/news/defi-enjoys-prolific-start-to-2023-dapprar-report