DeFi TVL surges near 2021 highs

• DeFi total value locked (TVL) reaches $134 billion, nearing 2021 levels.
• Growth fueled by liquid restaking tokens (LRTs) and Bitcoin Layer 2 (L2) networks.

What happened: Liquid restaking and Bitcoin L2s drive DeFi’s 150% growth

DeFi’s total value locked (TVL) has soared to $134 billion as of Dec. 9, a 150% rise year-to-date, approaching its $170 billion peak from 2021. This growth is attributed to the adoption of liquid restaking tokens (LRTs), protocols enabling users to restake previously staked assets for multiple rewards, and the rapid expansion of Bitcoin-native Layer 2 (L2) networks. Key contributors include EigenLayer, which has amassed over $17 billion in TVL, and Ethereum’s Lido protocol, the largest single DeFi TVL source with nearly $40 billion staked. On the Bitcoin front, L2s like CoreChain and Babylon are accelerating adoption, with tokenised Bitcoin staking reaching $2.5 billion in TVL.

Also read: DeFi 2.0: The next wave of decentralized finance innovation
Also read: Pavlovsky exits DeFi platform Marginfi due to policy disputes

Why it’s important:

The resurgence of DeFi TVL reflects the ecosystem’s evolving maturity and appeal to users seeking optimised staking returns. Innovations like liquid restaking and Bitcoin L2 networks have unlocked new ways to maximise yield and security, broadening the market’s scope. This renewed interest signals a positive trend for decentralised finance, with institutions likely to adopt these strategies as they become more accessible and refined. As DeFi TVL approaches its historic highs, it underscores a growing confidence in blockchain-based financial systems.