DeFi is showing signs of recovery as retail and institutional cash flows return

DeFi has had a rough ride heading into 2022, and data from Messari shows that the top 10 DeFi assets are currently down between 10% and 50% year-to-date.

Source: Messari

On the positive side, the situation could change once money starts pouring into the DeFi ecosystem after a month of decline, suggesting a return to institutional and retail funds in the crypto market.

Data from Defi Llama shows that the total value (TVL) across all DeFi platforms has increased from $185.14 billion on Jan. 31 to $202.67 billion today.

Source: Defi Llama

A closer look at each protocol contributing to TVL reveals that the biggest declines over the past 30 days have been in stablecoin-focused protocols like Curve (CRV) and Convex Finance (CVX), which are more popular on losses and collateral damage Rebase projects such as OlympusDAO (OHM) and Wonderland (TIME).

Projects tightly integrated with Curve also saw significant capital losses for TVL, with Yearn.Finance losing 28.57% and Abracadabra.money 46.3% due to conflicts between development team members.

However, every crisis presents an opportunity, and in this case, it is the decentralized stablecoin protocol Frax (FXS) that has benefited from the stablecoin shift. The TVL of the log has grown by 35.81% over the past 30 days.

DEX activity is still active

Aside from the TVL Index, which has its own strengths and weaknesses, activity in DeFi applications continues to grow year on year, with trading volume on decentralized exchanges (DEX) recording an all-time high over the past three months.

Monthly DEX trading volume by project | Source: Dune Analytics

Uniswap (UNI) remains the dominant DEX with 77.9% traded volume, followed by 7.8% with Curve and third place goes to SushiSwap (SUSHI) with 5.6%.

According to data from Token Terminalthe top three protocols by last three days’ daily transaction volume (GMV), a metric that measures the total value of sales over a period of time, are Uniswap, dYdX, and SpookySwap.

Top dApps based on GMV | Source: Token Terminal

DeFi users are on the rise

A final metric that points to continued adoption is the number of DeFi users (DAUs), which data from continues to grow steadily dune analysis.

On February 10, the number of unique addresses interacting with the DeFi app increased by more than 300% year-on-year from 1,369,368 to 4,363,238 addresses.

Source: Dune Analytics

A closer look at the most experienced user app reveals that Uniswap again dominates the field with 3,608,951 addresses interacting with the DEX protocol, followed by 1Inch with 1,108,570.

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