Total value locked (TVL) across all decentralized finance protocols hit another all-time high last week after gains of almost 2,000% over the past 12 months.
The crypto market momentum has spilled over intoÂ DeFiÂ again following a six-week correction for most tokens related to the industry. The TVL collateral figure has reached a record of $12.3 billion, according to DeFi Pulse, and this milestone means that it has increased by almost 2,000% since this time last year.
The billion-dollar increase in collateral since last Wednesday could be a result of increasingÂ EthereumÂ prices, considering most DeFi protocols and pools are based on ETH.
According to Coingecko, the market capitalization for DeFi related tokens has increased by $2 billion over the past couple of days, indicating that the rally could be reinitializing.
DeFi Bull Phase 2
DTC Capitalâ€™s Spencer Noon has labeled it as a â€œbull phase 2â€ that will be much larger than the summerâ€™s gains.
He added that DeFi farmers may have pivoted back into bitcoin after making major gains during the third quarter, saying:
â€œThe likely inflection point for DeFi Bull Phase 2 is the election, where there are multiple outcomes that would be favorable for risk assets. Until then, farmers will sit in BTC because itâ€™s low-maintenance and basically aÂ stablecoinÂ compared to what they were trading this summer.â€
While those astronomical returns appear to have dwindled for most DeFi protocols, there is still a vast amount of collateral locked up in smart contracts.
UniswapÂ is still the industry leader, according to DeFi Pulse, with $2.6 billion TVL and a 21% market share. Around $2 billion of this is locked into the four UNI earning ETH pools, which will continue to generate rewards until Nov. 17.
Messariâ€™s Jack PurdyÂ notedÂ thatÂ decentralized exchangesÂ are eating into the market share of their centralized cousins, with as much as 15% of the total trading volume for the third quarter.
DeFi Token Performance Mixed
Many of the DeFi-related tokens that took a big dive over the past two months are starting to register gains again. The majority of them, however, are still way down from their all-time highs.