The cryptocurrency market is experiencing a surge in capital inflows, with the decentralized finance (DeFi) sector leading the charge.
Capital Inflows Soar
According to Binance Research, capital flowing into the crypto space has increased significantly since the beginning of the year. DeFi has emerged as a major beneficiary, with its total value locked (TVL) rising from $54.2 billion to $94.9 billion, a 75.1% increase.
DeFi Sub-Sectors Flourishing
Binance Research notes that almost all DeFi sub-sectors have seen growth in inflows. Liquid restaking and yield markets have recorded the largest percentage increases in TVL, while collateralized debt positions have experienced a slight decline.
Diversification Key for DeFi Growth
The diversification of DeFi sub-sectors is crucial for the sector’s long-term growth. Binance Research believes that developing a diverse range of markets will unlock new financial primitives and maximize user value.
Market Valuation Lags Behind
Despite the surge in on-chain liquidity, the market valuation of DeFi has not yet fully recovered. Binance Research suggests that this may indicate a potential for further growth in the sector.
