BITCOIN AND ETHER NOW ACCOUNT FOR 44% OF THE VALUE LOCKED IN DEFI

The decentralized finance (DeFi) landscape is constantly evolving, with new protocols and innovations emerging at a rapid pace. Value Locked In Crypto DeFi Markets Hits $1 Billion Milestone. With Ether (ETH) breaking through the $200 mark yesterday, $1 billion in value is now locked in the DeFi markets. As of Feb. 7, ETH is trading close to $220 up 4.5% on the day and almost 22% on the week.As of late May 2025, the resurgence of the collective Total Value Locked (TVL) in DeFi has seen it knocking on the door of the $100 billion mark, showcasing a remarkable 44% increase since the start of the year.A significant portion of this growth can be attributed to the rise of Ether (ETH), which has appreciated by approximately 40% year-to-date and accounts for a substantial portion of the value locked in top protocols like Lido, EigenLayer, Aave, and Maker.While other cryptocurrencies play a role, the dominance of Bitcoin (BTC) and Ether remains undeniable. Law and Order. Crypto Advocacy Groups Urge Dismissal of Case Against Bitcoin Mixer Samourai. Two crypto advocacy groups, whose amicus curiae briefs on behalf of Samourai Wallet were denied this week by a federal judge, told Decrypt that along with other organizations, they urge the dismissal of the case against the Bitcoin mixer charged with operating as an illegal money transmitter.But how significant is their contribution exactly?The amount of BTC and ETH locked in DeFi is substantial – over $4 billion worth in the past five months alone.However, despite this impressive figure, Bitcoin and Ether now account for 44% of the total value locked in DeFi.This reveals a more nuanced picture of the DeFi ecosystem, one where, despite the giants BTC and ETH making huge contributions, the rest of the market is growing faster and taking up more relative space.

Understanding the TVL Landscape in DeFi

Total Value Locked (TVL) is a key metric for assessing the health and growth of the DeFi sector. The total value locked in Ostium Protocol, an open-sourced, decentralized exchange on Ethereum Layer 2 Arbitrum. It's sign of growing demand for DeFi as the sub-sector held steady, defying theIt represents the aggregate value of all assets deposited in various DeFi protocols, including lending platforms, decentralized exchanges (DEXs), and staking platforms.Monitoring TVL provides insights into the overall interest and adoption of DeFi solutions.

Currently, the total value locked in DeFi is on the cusp of reaching $100 billion, a testament to the sector's increasing popularity and utility.This resurgence is driven by several factors, including rising cryptocurrency prices, innovative DeFi products, and increased institutional participation.

The Dominance of Ethereum

Ethereum remains the dominant blockchain for DeFi applications, hosting a vast ecosystem of protocols and attracting the lion's share of TVL. In meno di cinque mesi, sono stati investiti nel settore della finanza decentralizzata quasi 4 miliardi di dollari in Bitcoin ed Ether . Secondo DeFi Pulse, il numero di Ether presenti nei vari protocolli DeFi aumentato del 218,5% da giugno, passando da 2,7 milioni a 8,6 milioni di ETH. I Bitcoin, invece, sono cresciuti di oltre il 3.000%Its robust infrastructure, smart contract capabilities, and large developer community make it an ideal platform for building and deploying DeFi solutions.Even with activity shifting to Layer 2 solutions, the DeFi stack on Ethereum remains robust, with L2s like Arbitrum hosting many Ethereum-native DeFi applications. Bitcoin and Ether now account for 44% of the value locked in DeFi -Ostium Protocol, an open-sourced, decentralized exchange on Ethereum Layer 2 Arbitrum, is a sign of the growing demand for DeFi.

Bitcoins Role in DeFi

While Ethereum dominates the DeFi landscape, Bitcoin also plays a crucial role, albeit a smaller one.Wrapped Bitcoin (WBTC) and other BTC-backed tokens allow Bitcoin holders to participate in DeFi protocols and earn yields on their holdings.The amount of BTC locked in DeFi, while smaller than ETH, is still substantial, representing a significant portion of Bitcoins overall market capitalization.

The Contribution of Bitcoin and Ether to DeFi's TVL

Let's delve into the specific contributions of Bitcoin and Ether to the total value locked in DeFi:

• Ether's TVL: The value of Ether locked in DeFi protocols is estimated at $3.24 billion, representing approximately 7.6% of Ethereum's total market capitalization.
• Bitcoins TVL: The total amount of BTC locked in DeFi is around $1.81 billion, which accounts for about 0.85% of Bitcoins market capitalization.

Combined, Bitcoin and Ether account for roughly 44% of the total value locked in DeFi.While this is a significant portion, it's important to note that other cryptocurrencies and stablecoins also contribute to the overall TVL.DeFi Pulse, a leading data aggregator, doesn't provide granular data on the percentage share of every single asset, but it is clear that the other assets do play a critical role.

Factors Influencing the TVL of Bitcoin and Ether in DeFi

Several factors influence the amount of Bitcoin and Ether locked in DeFi protocols:

• Market Sentiment: Bullish market conditions tend to increase the demand for DeFi products and services, leading to higher TVL.
• Yield Opportunities: Attractive yield opportunities on DeFi platforms encourage users to lock up their BTC and ETH to earn rewards. 尽管defi最近吸收了巨额的btc和eth，但锁定的比特币和以太坊价值目前仅占该行业总锁定价值（113.3亿美元）的不到一半，合计占该行业44.6％。 DeFi Pulse不提供有关其他特定加密资产（如SNX，COMP或DAI）在DeFi总锁定价值中所占百分比的数据。Ether.fi, with over $8 billion in total value locked, is a great example of a platform providing high-yield staking opportunities.
• Protocol Security: Users are more likely to lock their assets in protocols with a strong security track record.
• Regulatory Clarity: Clear regulatory frameworks can foster confidence in the DeFi sector and attract more participants.
• Ease of Use: User-friendly DeFi platforms with intuitive interfaces are more likely to attract a wider audience.

Why Are People Locking Up Their Bitcoin and Ether in DeFi?

The primary reason people lock up their Bitcoin and Ether in DeFi protocols is to earn yield. The resurgence comes as the collective TVL of DeFi similarly knocks on the door of the $100 billion mark, up 44% since the start of the year. Much of that can be attributed to the rise of ether up 40% year-to-date which accounts for the lionshare of value locked in the top 4 protocols: Lido, EigenLayer, Aave and Maker.DeFi platforms offer various ways to generate returns on digital assets, including:

• Lending: Lending BTC and ETH to borrowers and earning interest.
• Staking: Staking ETH to secure the Ethereum network and earning rewards.
• Liquidity Provision: Providing liquidity to decentralized exchanges and earning trading fees.
• Yield Farming: Participating in yield farming programs by providing liquidity to specific pools and earning rewards in the form of governance tokens.

DeFi staking is simple: choose a platform, set up a wallet, stake your tokens, review terms, confirm, monitor, and collect rewards.You simply wait for rewards to be sent to your wallet or staking account after the lock-up period or at the end of each epoch.

The Rise of Layer-2 Solutions and Their Impact on TVL

Ethereum Layer-2 (L2) solutions, such as Arbitrum, Optimism, and zkSync, are playing an increasingly important role in the DeFi ecosystem.These solutions offer faster transaction speeds and lower gas fees compared to the Ethereum mainnet, making DeFi more accessible and scalable.

The rise of L2 solutions has had a significant impact on TVL, as many DeFi protocols are now deploying on these networks.This has led to a more distributed DeFi landscape, with TVL spread across multiple blockchains and L2s.

The Future of TVL in DeFi

The future of TVL in DeFi is bright, with continued growth expected in the coming years.Several factors will contribute to this growth, including:

• Increased Adoption: As more people become aware of the benefits of DeFi, adoption will continue to rise, leading to higher TVL.
• Innovation: New and innovative DeFi products and services will attract more users and capital to the sector.
• Institutional Participation: Increased institutional participation in DeFi will bring significant capital inflows and boost TVL.
• Scalability Solutions: Further advancements in scalability solutions, such as L2s and sharding, will make DeFi more accessible and scalable, driving TVL growth.

Common Questions About Bitcoin, Ether and DeFi

What are the key benefits of using DeFi protocols?

DeFi offers several advantages over traditional financial systems, including:

• Transparency: DeFi protocols are transparent and auditable, allowing users to verify transactions and ensure fair practices.
• Accessibility: DeFi is accessible to anyone with an internet connection, regardless of their location or financial status.
• Efficiency: DeFi transactions are typically faster and cheaper than traditional financial transactions.
• Decentralization: DeFi protocols are decentralized, meaning they are not controlled by any single entity.
• Yield Opportunities: DeFi offers various opportunities to earn yield on digital assets, often at rates higher than those offered by traditional banks.

What are the risks involved in DeFi?

While DeFi offers many benefits, it also carries certain risks, including:

• Smart Contract Risks: Smart contracts are susceptible to bugs and vulnerabilities, which can lead to loss of funds.
• Impermanent Loss: Liquidity providers on decentralized exchanges can experience impermanent loss, which occurs when the value of their deposited assets changes relative to each other.
• Rug Pulls: Some DeFi projects are scams designed to steal users' funds, often referred to as ""rug pulls.""
• Regulatory Uncertainty: The regulatory landscape for DeFi is still evolving, and new regulations could impact the sector.
• Volatility: The value of cryptocurrencies can be highly volatile, which can impact the value of assets locked in DeFi protocols.

How can I mitigate risks in DeFi?

Here are some tips for mitigating risks in DeFi:

• Do Your Research: Thoroughly research any DeFi protocol before investing your funds.Understand the risks involved and the security measures in place.
• Use Reputable Platforms: Stick to well-established and reputable DeFi platforms with a proven track record.
• Diversify Your Holdings: Don't put all your eggs in one basket.Diversify your holdings across multiple DeFi protocols and asset classes.
• Use Hardware Wallets: Store your cryptocurrencies in a hardware wallet to protect them from hacking and theft.
• Stay Informed: Keep up-to-date with the latest news and developments in the DeFi sector to stay informed about potential risks and opportunities.

How can I stay up to date with the DeFi market?

There are many ways to stay informed about the DeFi market:

• Follow Industry News Sources: Stay updated on the latest DeFi news and developments by following reputable crypto news websites. 111K subscribers in the defi community. News, articles and discussions about decentralized financial protocols on any blockchainExamples include Decrypt, which also reported on the Samourai Wallet case, and other similar outlets.
• Join Online Communities: Engage with other DeFi enthusiasts in online communities like Reddit (r/EthTrader, r/CryptoCurrency, and the defi community with 111k subscribers), Discord, and Telegram.
• Use DeFi Data Aggregators: Utilize DeFi data aggregators like DefiLlama to track TVL, yields, and other important metrics across various protocols.
• Attend Industry Events: Attend DeFi conferences and meetups to network with industry experts and learn about the latest trends.

Conclusion: Bitcoin and Ether's Enduring Influence on DeFi

While Bitcoin and Ether's dominance in terms of TVL may have slightly decreased, their influence on the DeFi sector remains undeniable.These two cryptocurrencies continue to be cornerstones of the DeFi ecosystem, providing liquidity, security, and a foundation for innovation. Ethereum has rebounded ~45% in late May, outperforming Bitcoin and DeFi peers, marking a strong start to June 2025. Technically, ETH faces resistance at $2,825 and $3,013. A daily close above $3,013 could trigger a rally toward $4,000, while rejection might lead to a correction toward $2,000.As DeFi continues to evolve and mature, the roles of Bitcoin and Ether will likely adapt and expand, further solidifying their importance in this rapidly growing space.The recent rebound of Ethereum by about 45% in late May is an example of its market dominance over Bitcoin and other DeFi peers. The value of Ether locked in DeFi is $3.24 billion, or 7.6% of Ethereum s total market cap. The total amount of BTC locked is $1.81 billion, or 0.85% of Bitcoin s market cap.However, it also faces significant resistance.Looking ahead, a daily close above $3,013 could trigger a rally toward $4,000, while rejection might lead to a correction toward $2,000. DefiLlama is a DeFi TVL aggregator. All Ethereum Solana Bitcoin BSC Tron Base Arbitrum Sui Hyperliquid L1 Avalanche Aptos Berachain Total Value Locked in DeFiIt is important to stay up-to-date with market news and current trends.Bitcoin and Ether are here to stay, and their impact on the future of finance is only beginning to unfold.

Key Takeaways:

• Bitcoin and Ether now account for 44% of the total value locked in DeFi.
• Ethereum remains the dominant blockchain for DeFi applications.
• Bitcoin plays a crucial role in DeFi through wrapped BTC and other BTC-backed tokens.
• The rise of Layer-2 solutions is impacting TVL distribution.
• DeFi offers various yield opportunities but also carries inherent risks.

Ready to explore the world of DeFi? As of mid-2025, it hosts over 1,300 DeFi protocols with an aggregate Total Value Locked (TVL) of approximately $46.3 billion, dwarfing its nearest competitors. Even as activity shifts to Layer 2s, the DeFi stack on Ethereum remains robust, with L2s like Arbitrum hosting many Ethereum-native DeFi apps.Start by researching reputable platforms, understanding the risks, and diversifying your holdings.Happy DeFi-ing!