The decentralized finance (DeFi) market has demonstrated a significant rebound in early July, with the total value locked (TVL) reaching $116.416 billion—a level not seen since April. This 4.95% increase over 24 hours reflects both rising crypto asset prices and renewed deposit flows into lending protocols, restaking services, and yield primitives.
While Ethereum and Solana continue to absorb the majority of DeFi capital, restaking protocols such as EigenLayer and ether.fi have established themselves as structural pillars of on-chain liquidity.
Leading DeFi Protocols by TVL
At the top of the DeFi rankings, AAVE has reaffirmed its position as the dominant money market, with $25.871 billion in value locked across 18 chains. Its 2.62% month-over-month growth reflects user preference for maturity, scale, and liquidity depth—especially during periods of rising ETH borrowing costs. AAVE now holds over 22% of the entire DeFi TVL, outpacing Lido and other restaking alternatives.
Lending has emerged as one of the most stable categories within DeFi, supported by protocols like Morpho, which posted a monthly gain of 25.35%. Morpho’s influence is closely tied to its hybrid peer-to-peer lending structure and increased collateral ceilings, particularly for stETH. Its rapid ascent to $4.498 billion in TVL places it just outside the top 10 and well above historical competitors like JustLend and Pendle.
Meanwhile, Pendle, which enables tokenized fixed-yield strategies, recorded an 11.71% monthly increase to $4.822 billion. The continued appetite for principal and yield token separation—especially in a market with few new lending primitives—shows persistent demand for yield certainty, even as duration risk remains.
Here is a snapshot of the top DeFi protocols by TVL:
| Protocol | TVL (Billions) | Monthly Change |
|---|---|---|
| AAVE | $25.871 | +2.62% |
| Lido | $23.614 | +0.80% |
| EigenLayer | $12.145 | +7.41% |
| Binance Staked ETH | $7.186 | +14.16% |
| ether.fi | $6.72 | +0.11% |
The Rise of Restaking and Native Ethereum Ecosystems
Ethereum’s native restaking ecosystem remains one of the few areas in DeFi consistently attracting new capital. EigenLayer, with $12.145 billion in TVL, saw a 7.41% increase last month despite the conclusion of certain phases of its points program. This growth underscores its expanding role as collateral infrastructure for actively validated services (AVS) and shared security mechanisms.
Another key player in restaking, ether.fi, maintained its position with $6.72 billion, though its 0.11% growth over the past month suggests a plateau after rapid accumulation in Q2. Together, EigenLayer and ether.fi now control over $18.8 billion—representing more than 16% of all DeFi capital—rivaling the entire TVL of Lido and the full DeFi stack of Tron.
Notable Market Movements and Trends
A notable outlier is Ethena, which experienced a 5.74% decline in TVL to $5.464 billion. This decrease likely reflects sUSDe redemptions and reduced short-term enthusiasm for synthetic dollar yields after months of explosive growth. With a Mcap/TVL ratio now at 0.32, Ethena still holds a premium valuation, but the market appears to be rotating some capital toward more sustainable yield venues.
The performance of BlackRock’s BUIDL token, though down 2.32% for the month, exemplifies the role real-world assets (RWA) play in anchoring capital during volatile periods. With a Mcap/TVL ratio of 1.01, the fund remains fully backed by tokenized Treasury bills and shows little deviation in either direction. BUIDL’s $2.832 billion TVL makes it the 15th largest DeFi protocol and the largest tokenized RWA instrument to date.
The marginal decline reflects recent weakness in Treasury prices rather than protocol issues. As yields rise again at the front end of the curve, the question remains whether demand for risk-weighted tokenized assets can exceed capital rotation toward higher-yielding on-chain instruments.
DEX Volumes and Market Health Indicators
Last week saw a convergence of spot and perpetual DEX volumes, landing at $13.653 billion and $13.084 billion, respectively. This parity is unusual, as perpetual markets typically exceed spot markets by a wide margin, and may indicate a healthy shift toward hedging activity or organic demand for underlying assets.
During previous periods of market euphoria, perpetual volumes often inflated disproportionately due to leverage-driven speculation. The current ratio suggests more disciplined capital deployment, possibly reflecting the influence of larger players and more risk-aware strategies dominating DEX activity.
Blockchain Dominance and Layer-2 Growth
Ethereum continues to dominate DeFi TVL with $65.035 billion, accounting for over 55% of the total value locked. Its one-day (+6.42%) and seven-day (+6.21%) changes show strong, consistent inflows driven by asset appreciation and migration of deposits to L1 vaults.
Solana now commands $8.768 billion in DeFi TVL, a 7-day increase of 5.67%. The chain continues to benefit from renewed interest from both institutional and retail investors, likely supported by recent approvals of spot SOL ETFs in Canada and growing NFT activity. With several high-performing DEXs and yield farms, Solana has increased its share to 7.5%—its highest level since Q1 2024.
Other networks, such as Base (+5.40% daily) and Sui (+9.77% daily), posted solid one-day gains, hinting at new capital rather than mere price effects. Although these inflows remain modest in dollar terms, they mark a directional signal that Layer 2 and alt-L1 networks are beginning to recapture attention—especially as Ethereum fees remain elevated.
Stablecoins: The Latent Fuel of DeFi
Stablecoins continue to serve as latent fuel for DeFi. At $254.598 billion, the total stablecoin market capitalization is more than double the value locked in DeFi protocols. This 2.19x ratio hints at redeployment potential, particularly if rates remain attractive and new structured products emerge. It also provides protection against forced liquidations during sudden volatility, as more capital remains parked in indexed assets rather than active yield strategies.
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Frequently Asked Questions
What is Total Value Locked (TVL) in DeFi?
TVL represents the total amount of assets deposited in decentralized finance protocols. It serves as a key indicator of ecosystem health and user confidence, combining both native tokens and stablecoins locked in smart contracts.
Why are restaking protocols gaining popularity?
Restaking allows users to earn additional yield on already-staked assets by securing other network services. Protocols like EigenLayer provide shared security models that enable greater capital efficiency while maintaining Ethereum's consensus safety.
How do real-world assets (RWA) impact DeFi?
Tokenized real-world assets like Treasury bills provide stable yield sources backed by traditional finance instruments. They offer diversification benefits and attract institutional capital seeking regulated exposure to blockchain-based returns.
What does the convergence of spot and perpetual volumes indicate?
When spot and perpetual trading volumes reach parity, it often suggests more balanced market participation with reduced speculative leverage. This can indicate healthier organic demand for underlying assets rather than derivative speculation.
Which factors are driving Solana's DeFi growth?
Solana benefits from low transaction costs, high throughput, and growing institutional interest through ETF approvals. Its technical performance makes it attractive for high-frequency trading strategies and NFT-related financial activity.
How might stablecoin reserves affect future DeFi growth?
The large stablecoin reserves sitting outside protocols represent potential deployment capital. If yield opportunities increase or new products emerge, these funds could quickly flow into lending markets, restaking pools, and yield farms.
The first week of July painted a picture of renewed strength for DeFi, particularly in core lending and restaking segments. With a stablecoin surplus, maturing yield primitives, and clear user rotation toward blue-chip protocols, DeFi appears to be entering the second half of 2025 on more solid footing than at any point this year.