DeFi protocols and the nonfungible token (NFT) markets have seen a rejuvenation in the first month of 2023. According to a report by DappRadar, DeFi hit a total value locked (TVL) of $74.6 billion, which is a 26% increase from December.
The report also highlights the growth of the DeFi sector and the upticks in trading volume and sales in the NFT markets.
One of the top DeFi performers, Optimism, saw a 57.44% increase in TVL, reaching $808 million. This increase is believed to have been driven by the “learn-to-earn” incentives program that ended halfway through January.
Solana also saw a 57% increase in TVL, reaching $548 million, which was driven by Marinade Finance’s introduction of a token incentive scheme.
The upcoming Ethereum upgrade in Shanghai is also driving staking in DeFi, as withdrawals are expected to open from Ethereum staking contracts. Lido Finance flipped Maker DAO as the largest DeFi protocol in January, driven by the popularity of liquid staking derivative protocols.
Lido saw over $8 billion worth of value staked in its platform, an increase of over 36% since December 2022.
The NFT markets also saw a resurgent start to the year, with trading volume reaching $946 million in January, marking a 38% increase month on month. Ethereum still dominates the NFT market, accounting for 78.5% of total trading volume. Meanwhile, Polygon saw a significant 124% jump in its NFT trading volume and a total of 4.5 million NFT sales.
Despite the overall positive growth in the DeFi and NFT markets, it’s worth noting that some platforms, such as Everlend, have had to shut down due to a lack of liquidity. Nevertheless, with the crypto market being bullish and leading to an increase in investor confidence, DeFi and NFTs are set for a promising year.
DeGods and Monkey Kingdom were two of the NFT collections that helped drive a 23% increase in Solana’s NFT trading volume in January 2023. On the other hand, Polygon saw a huge 124% rise in its NFT trading volume, with a total of 4.5 million NFT sales. The boost in Polygon’s NFT market was partly due to the popularity of the “Collect Donald Trump Cards.“
Joy Rice is a computer science graduate and crypto writer with a strong understanding of blockchain technology. She writes about the latest developments in the crypto industry, and is passionate about educating and informing readers about the potential uses of blockchain.