<span data-preserver-spaces="true">We see the launch of new DeFi protocols daily, with new tokenomics and new use cases. After layer 1 blockchains, DeFi protocols are the most talked-about category in the web3 community. DeFi started the 2020-2021 bull run, while most of the blue-chip DeFi tokens have been downtrend since May 2021. DeFi Protocols usage has not slowed down, and users are continuously increasing on these protocols. This article covers the analysis of the DeFi space and its major protocols.</span>
<h2><span data-preserver-spaces="true">DeFi Pulse Index Price Performance</span></h2>
<img class="alignnone wp-image-231215 size-large" src="https://www.cryptoknowmics.com/news/wp-content/uploads/2022/04/madpi-1024x588.png" alt="DeFi Pulse Index Price Performance" width="1024" height="588" />

<span data-preserver-spaces="true">Defi Pulse Index (DPI)is a capitalization-weighted index that tracks the performance of decentralized financial assets across the market. The underlying tokens whose performance DeFi Pulse Index tracks are Uniswap, Maker, Aave,<a href="https://www.cryptoknowmics.com/news/is-loopring-the-future-decentralized-exchange-protocol/"> Loopring</a>, Synthetic, Yearn, Sushi, Compound, REN, Rari Capital, KNC, Balancer, Badger, Farm. </span>

<span data-preserver-spaces="true">The price action of DPI token can be used as a metric to evaluate the market price performance of DeFi tokens. Currently, DPI token has made a higher high on a daily and weekly level, showing that DeFi tokens have caught investors' attraction. A significant driver of the DeFi rally is Aave. Since the launch of Aave V3 on March 16, AAVE token price has increased by more than 90 percent. While many DeFi token's prices rose last week, these tokens are still down more than 60 % from their all-time high price.</span>
<h2><span data-preserver-spaces="true">DeFi Users Over Time Going Up Only</span></h2>
<img class="alignnone wp-image-231214 size-large" src="https://www.cryptoknowmics.com/news/wp-content/uploads/2022/04/marketanalysisdefiuser-1024x360.png" alt="DeFi Users Over Time Going Up Only" width="1024" height="360" />

<span data-preserver-spaces="true">At the time of the DeFi summer of 2020, total DeFi users were around 250 K, and now there are about 4.5 million users. Users are continuously increasing irrespective of the price movement of the crypto market. </span>
<h2><span data-preserver-spaces="true">Uniswap Dominance in DEX Category</span></h2>
<img class="alignnone wp-image-231216 size-full" src="https://www.cryptoknowmics.com/news/wp-content/uploads/2022/04/dadexmetricsss.png" alt="" width="402" height="424" />

<span data-preserver-spaces="true"><a href="https://www.cryptoknowmics.com/news/uniswap-protocol-review-leading-decentralized-exchange/">Uniswap</a> is the most traded DEX by volume in DeFi. Uniswap has a 79.9% market share among DEXes on Ethereum. After Uniswap's V3 launch, more liquidity providers have moved to Uniswap to provide liquidity to earn trading fees in exchange. Improved capital efficiency that allows for low-slippage trade execution is the reason behind the increased volume of assets being traded on Uniswap. </span>
<h2><span data-preserver-spaces="true">Total Value Locked in DeFi is Increasing</span></h2>
<h2><img class="alignnone wp-image-231217 size-large" src="https://www.cryptoknowmics.com/news/wp-content/uploads/2022/04/defillamametric1-1024x385.png" alt="" width="1024" height="385" /></h2>
&nbsp;

<span data-preserver-spaces="true">Total Value Locked on DeFi Dapps is currently worth 235 billion dollars. The majority of the TVL is on Dapps running on Ethereum, Ethereum Dapps TVL market share is 54%. Despite extensive market corrections of cryptocurrencies in the first quarter of 2021, TVL has not dropped much. Current TVL is only 21 billion dollars short from its all-time high value of 256 billion dollars. The curve is the leading Dapp in terms of TVL and has 20.81 billion dollars of TVL locked on its platform, which supports the trading of stablecoins with low slippage. </span>
<h2><span data-preserver-spaces="true">Massive Increase of TVL on Lido  </span></h2>
<img class="alignnone wp-image-231218 size-large" src="https://www.cryptoknowmics.com/news/wp-content/uploads/2022/04/defillamametric2-1024x642.png" alt="Massive Increase of TVL on Lido" width="1024" height="642" />

<span data-preserver-spaces="true">The<a href="https://www.cryptoknowmics.com/news/curve-protocol-leading-dex-for-stablecoins/"> curve</a> will not be the market leader in terms of TVL anymore. After an impressive 65% increase in TVL in the last month on Lido, it seems Lido will soon be the number one Dapp in terms of TVL.  </span>

<img class="alignnone wp-image-231219 size-large" src="https://www.cryptoknowmics.com/news/wp-content/uploads/2022/04/MALidoanalysis-1024x470.png" alt="Analysis of Lido" width="1024" height="470" />

<span data-preserver-spaces="true">Ethereum is the most deposited asset on Lido. The recent surge in the past month in TVL has also come from Ethereum being deposited in large quantities. The rise of Ethereum deposits on Lido is due to the upcoming Ethereum merge. According to Into the Block, staking rewards on staked Ethereum will be around 7% - 12 % after the merge.</span>

<span data-preserver-spaces="true">Lido allows users to stake any amount of Ethereum in exchange for stETH, which can be used for lending, collateral, and other purposes, while still collecting daily staking rewards. A user's balance will increase once each day as their staked ETH creates staking incentives, allowing them to receive the value of their staking rewards. Users can unstake at any time through the use of stETH-ETH liquidity pools.</span>

<span data-preserver-spaces="true">This unique advantage of <a href="https://www.cryptoknowmics.com/news/all-you-need-to-know-about-liquid-staking/">liquid staking</a> that Lido provides to holders of Ethereum is the reason behind the massive surge in TVL. These TVL numbers will likely increase after the successful Ethereum Merge upgrade. </span>
<h2><span data-preserver-spaces="true">Conclusion</span></h2>
<span data-preserver-spaces="true">DeFi tokens prices have finally started showing strength after months of the downtrend.  Aave has launched its new version and brought new innovation to the space, while Uniswap has continued its dominance in the DEX space. Users are growing at an impressive pace, and it doesn't appear the growth will be stopping soon. Lido's liquid staking feature has attracted lots of capital on its platform. </span>

<span data-preserver-spaces="true">Overall, DeFi appears to be in a good state. The only area where this space is lacking is not much interest from investors in DeFi tokens. The weak tokenomics is the root cause behind it. Current tokenomics of most protocols are only beneficial for the short term. As time passes, the selling pressure on these tokens increases due to the dumping of tokens by yield farmers. Change in tokenomics which is beneficial for the long term might attract investors again. </span>

DeFi Dapps Demand Rises Among Users

DeFi Protocols usage has not slowed down, and users are continuously increasing on these protocols. This article covers the analysis of the DeFi space.

Yash completed his graduation in b.tech (Computer Science ). Yash is passionate about applications of blockchain technology. Yash believes use of blockchain technology can transform our lives at a large scale. Yash daily reads articles, research reports and also  documentation of different protocols. Yash listen to podcasts to know the view of industry experts.

DeFi Dapps Demand Rises Among Users

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