Aave, a leading decentralized finance (DeFi) platform, has reached an unprecedented milestone with net deposits totaling $33.4 billion. This figure surpasses the previous record set during the 2021 bull market and signifies the continued growth of DeFi.
Expansion of Supported Markets in 2024
In addition to this impressive growth, Aave expanded its presence in 2024 by adding BNB Chain, Scroll, ZKsync Era, and Ether.fi to its supported list of markets. This expansion allows more users to access the benefits of DeFi on various blockchain networks.
Potential New Markets for 2025
Aave has announced plans to add several new markets in 2025, pending community approval. The proposed additions include:
- Sonic: A new market that will provide users with a secure and efficient way to interact with the DeFi ecosystem.
- Mantle: A scalable and interoperable blockchain network that will enable seamless interactions between different blockchains.
- Linea: An Ethereum layer-2 scaling solution that aims to improve transaction speeds and reduce gas fees.
- BOB: A Bitcoin layer-2 solution that seeks to increase the scalability of Bitcoin transactions.
- Spider Chain: A blockchain network designed for decentralized applications (dApps) and DeFi protocols.
- Aptos: A fast, secure, and scalable blockchain network that supports a wide range of use cases.
Impact of US Elections on DeFi
DeFi experienced a significant surge in total value locked and activity following the 2024 US elections. The expectation of a friendlier regulatory environment and pro-crypto policies contributed to this growth. In fact, DeFi tokens rallied by up to 30% immediately after the election results.
Potential Revenue Streams for DeFi Projects
If comprehensive crypto legislation is passed, DeFi projects may be able to explore revenue sharing via fees that accrue to their respective tokens. Charlie Sherry, head of finance and a cryptocurrency analyst at BTC Markets, believes that this development will encourage DeFi projects to incorporate value accrual mechanisms.
Total Value Locked in DeFi
According to data from DefiLlama, the total value currently locked in DeFi is approximately $130 billion. This represents a 150% increase in total value locked across the sector since 2024.
Growth Drivers in DeFi
Several factors contributed to the growth of DeFi:
- Liquid restaking protocols: EigenLayer and other similar platforms have increased adoption and usage.
- Bitcoin DeFi products: The proliferation of Bitcoin wrappers and layer-2 networks has expanded the DeFi ecosystem.
- Security measures: Protocol updates, stronger cryptography, and robust bridges have bolstered the security of decentralized finance platforms.
DeFi Hacks Decline by 40%
A welcome development for the DeFi sector is the decline in hacks. According to Hacken, protocol updates, stronger cryptography, and more robust bridges have reduced the number of hacks compared to 2023.
Contrast with Centralized Exchanges
In contrast, monetary losses from hacks and breaches of centralized exchanges nearly doubled during the same period, with losses crossing $694 million for the year. This highlights the importance of security measures in preventing hacks and protecting user funds.
Conclusion
The growth of DeFi in 2024 is a testament to the increasing adoption and acceptance of decentralized finance platforms. As Aave continues to expand its presence and support new markets, it is likely that DeFi will remain a dominant force in the cryptocurrency industry.