A fresh new report from DappRadar, total-value-locked in decentralized finance (DeFi) has rebounded strongly in the first quarter of 2023, despite the double-digit slump in the number of daily users observed. DappRadar is a decentralized marketplace for dApps and is one of the biggest Web3 dApp distribution platforms in the industry.

So, according to the DappRadar Q1 2023 Industry Report, total-value-locked (TVL) in DeFi has risen by over 37% in the past quarter, between January to March 2023 to tag $83.3 billion while the number of unique wallets interacting with these DeFi applications fell by nearly 15% over the same time period, compared with a 10% drop in Web3 dApp users overall in the industry.

The report also noted a significant increase in the interest in scaling platforms and the price of ETH contributed to the growth of TVL in DeFi. One of the main drivers of this activity has been the rise in the popularity of Ethereum-based layer-2 scaling solutions like Arbitrum, Fantom, Optimism, and Polygon - all of which have contributed greatly. The highly anticipated Arbitrum airdrop has also been one of the biggest drivers of trading activity. ARB's airdrop was so successful that its launch on March 23 resulted in a major record-breaking daily transaction count on Arbitrum of 2,728,907, surpassing Ethereum and Optimism!

Another activity that increased activity in the Ethereum DeFi space was the introduction and the mainnet beta launch of Polygon's zero-knowledge rollup, zkEVM.

Further, the recent collapse of the Silicon Valley Bank, and the subsequent de-pegging of the USDC stablecoin, led to a major drop in the TVL in DeFi of just under 10%, but the market quickly recovered after the depositors were able to recover their funds stuck within the bank.

Ethereum solidifying its lead

According to the DappRadar Q1 2023 Industry Report, Ethereum and its overall layer-2 ecosystem grew at a breakneck pace, and mostly at the expense of other rival layer-1 networks in the first quarter of 2023. Ethereum has now further strengthened and solidified its position as the top smart contract platform accounting for 67% of all the TVL in decentralized finance.

Even daily active users on the Ethereum network grew 55% from 81,000 to 126,000, on a quarter-over-quarter basis. For comparison, Polygon users increased by 25% while Arbitrum, the latest in the block with its own token, skyrocketed to produce a 125% growth. Thus, Ethereum now represents two-thirds of the overall DeFi TVL.

To contrast this, BNB Chain daily users fell by a hefty 28% to 449,000, while Solana saw an even bigger 40% plunge in numbers to 74,000 while EOS slumped 22% to 27,000 in the same timeframe.

BNB Chain accounts for nearly 21% of the overall DeFi TVL and its top dApp, PancakeSwap is the most popular DeFi protocol by far in the industry, with over 1.37 million wallets interacting with it only in the month of March 2023.

Thus, things look pretty optimistic for the  DeFi sector as a whole and more so for the leading player in the market, Ethereum. With the Shanghai Capella Upgrade slated for April 12, we can see further growth coming into the largest smart contract platform by TVL and market capitalization.

Values as on April 3, 2023.

Read more on: Ethereum Shanghai Upgrade