The new political landscape that is presented in the United States generates enormous optimism among investors in the crypto world. This is reflected in all instances of the market for these digital assets. In the case of DeFi, the positive moment of this sector is manifested with the increase in its total value locked (TVL).
The TVL of decentralized finance, like trading volume, is generally taken as a gauge of the health of that sector. TVL is the equivalent of assets under management (AUM) in traditional finance. In simple words, it is the capital that investors deliver for specific periods to management firms.
Within DeFi, these funds are blocked for certain periods and the protocols’ smart contracts put them to work. Once the cycle is complete, the funds are unlocked and returned to investors with their respective returns. At this point, investors decide whether to lock capital again or withdraw. In negative periods, investors leave.
For their part, in periods of optimism, investors reinvest and even increase their bets. This last dynamic is what drives up the TVL index of the DeFi sector. According to the DeFiLlama portal, the TVL currently stands at $96.34 billion.
DeFi TVL rose almost 11% in 3 days to $96.3 billion. Source: DeFiLlama
DeFi TVL up almost 11% since Tuesday
According to the aforementioned data portal of the world of decentralized finance, last Tuesday, the days of the US elections, the general TVL was $86.8 billion dollars. Meanwhile, at the time of writing this note (Friday) the blocked capital represents $96.3 billion in the same monetary denomination.
This rise of 10.94% in just three days shows the enormous enthusiasm of DeFi investors regarding the American political landscape. The promised new legislation would allow protocol developers to work on clear rules. As a result of the latter, dApps would be legally opened to the big boys on Wall Street.
Without exaggeration, the current TVL of DeFi could represent a particle of what it would be like when the new regulation comes into play. This enthusiasm explains the accelerated growth of TVL in recent days. Given the expectations of a promising future, some investors decide to open their positions from now on.
Among the particular protocols that are the protagonists in this increase in TVL, the liquid staking protocol, Lido, stands out, with +15.8% in one week. Most major protocols show double-digit TVL increases with some going over +20% in a week.
If this pace continues, it is expected that in the coming days maximums of 2024 will be reached in the TVL. In June of this year, this measurement peaked this cycle at $106.8 billion. Meanwhile, all-time highs were recorded in November 2021, with $173 billion in lockdowns.
Do you want to always be updated in the world of cryptocurrencies? Subscribe now to the CriptoTendencia WhatsApp channel! Here you will instantly receive the most relevant information about Bitcoin, Altcoins, DeFi, NFTs, Blockchain and the Metaverse.
Related
Crypto Keynote USA
For the Latest Crypto News, Follow ©KeynoteUSA on Twitter Or Google News.
