Over the past four months, the Ethereum network has experienced several rises as institutional inflows and a surge in decentralized activity have coincided.
The Total Value Locked (TVL) on Ethereum is $51.3 billion, with protocols reporting increased inflows. Lido, Maker, and EigenLayer remain the top three TVL companies, with $32 billion, $9.1 billion, and $9 billion, respectively.
According to data from DefiLlama, the frequency of transactions involving decentralized finance (DeFi) protocols is increasing, resulting in a jump in values locked on most platforms.
Eth Dominates DeFi TVL
While Ethereum increased by 6% in the last seven days, Bitcoin had a whopping 30% increase. This identifies the broader market as a primary driver for the growing DeFi environment.
Ethereum has a market share of 60.03%, followed by Tron and Binance Smart Chajn with 11.6% and 5.5%, respectively.
DeFi activity increased significantly beginning in Q4 2023, with substantial inflows lifting the market out of its bad cycle. The 2022 bear market was mostly triggered by macroeconomic issues, with industry implosions resulting in dropping asset prices and low DeFi volumes. Bitcoin and Ethereum, the market leaders, lost 55% of their volume, as the entire ecosystem floundered.
The anticipation of a spot BTC ETF clearance by the United States Securities and Exchange Commission (SEC) resulted in inflows into institutional products, pushing assets under management (AUM) above $67 billion.
Activities increased following BlackRock’s spot Bitcoin ETF filing, combined with renewed institutional interest in the market, pushing the price of BTC past $40,000 in December.
Institutions have also looked to Ethereum as spot ETF ambitions gain traction following Bitcoin’s success. Bitcoin ETFs have received more than $5.2 billion in inflows, with numerous analysts projecting even more.
As institutional funds grow, investors seek to earn interest on more goods across several networks. Ethereum, the largest smart contract blockchain, has benefited from the recent market rise.
Major corporations have identified ETH as the next cryptocurrency ETF in the market, prompting additional investments. Last year, a group of money managers identified Ethereum as the asset with the greatest growth potential.
Institutional traders made their selection based on Ethereum’s staking functionality and the undervalued story at the time.
Similarly, a new Coinbase market report reveals institutional interest in Ethereum in anticipation of potential ETF approval in the United States.
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