The decentralized finance (DeFi) sector experienced a period of intense growth and transformation throughout June. Key metrics such as total value locked, stablecoin market capitalization, and lending volumes saw significant increases, indicating strong momentum and rising interest in blockchain-based financial solutions.
Total Value Locked Increases by 83.5%
Total value locked (TVL) is a crucial metric for assessing the scale and adoption of DeFi projects. It represents the amount of assets—including ETH, USDT, USDC, and WBTC—locked in platforms such as decentralized exchanges, lending protocols, and synthetic asset platforms.
In June, the TVL in Ethereum-based DeFi projects grew from $1.026 billion to $1.882 billion, marking an 83.5% monthly increase. A significant portion of this growth occurred after June 15, when Compound began distributing its governance token, COMP. The upward trend continued into early July, with TVL surpassing $2 billion on July 2.
Stablecoins: USDT Market Cap Exceeds $10 Billion
The stablecoin market has been on a steady upward trajectory since the beginning of the year, with accelerated growth starting in March. An analysis of the top seven stablecoins—USDT, USDC, PAX, BUSD, TUSD, HUSD, and DAI—shows that the total market cap rose from $5.836 billion in January to $10.968 billion by early June. By the end of the month, it reached $12.024 billion.
June also witnessed several landmark events in the stablecoin space. On June 29, USDT's market capitalization surpassed $10 billion for the first time following a $300 million issuance on the Ethereum network. Among other stablecoins, USDC demonstrated remarkable growth, with its market cap increasing by 34.9%—from $731 million to $986 million. In a significant development, the Algorand Foundation announced a partnership with Circle to launch USDC on the Algorand blockchain. Earlier, in March, Tether had already issued 1 million USDT on the same network.
Lending Volumes Grow by 134%
Lending is one of the core use cases within DeFi. In June, the total borrowing volume across Ethereum-based lending platforms surged from $545 million to $1.276 billion—an increase of 134%. Prior to June, Maker dominated the lending market, but Compound has since taken a commanding lead.
At the beginning of the month, Maker accounted for 73.59% of all borrowing volume, while Compound held just 15.26%. By the end of June, Compound’s borrowing volume had skyrocketed by 1,869%, reaching $3.835 billion.
The rapid rise of Compound has reshaped the DeFi landscape and introduced new participation models. Out of a total supply of 10 million COMP tokens, 5,004,949 were allocated to users. Initially, distribution was tied to interest earned on specific assets, but the mechanism was adjusted at the end of June. The new model bases rewards on the total dollar value of assets supplied or borrowed on the platform.
While DeFi continues to show strong promise, certain market dynamics suggest the presence of speculative activity. For instance, COMP tokens grant holders governance rights but do not entitle them to a share of the platform’s revenue. As of June 30, the spread between deposit and borrowing rates on Compound was notably high—reaching nearly 20% for BAT. This indicates that the platform continues to rely on interest margins, though these earnings do not benefit COMP holders.
Moreover, COMP distribution has led to unusual incentives, such as scenarios where borrowing yields exceed deposit yields. These conditions have attracted numerous arbitrageurs, making it difficult to gauge genuine user demand. Should borrowing volumes decline or the price of COMP fall, a significant portion of these funds may be withdrawn.
👉 Explore more DeFi lending strategies
Decentralized Exchanges Reach a Minor Peak
Trading remains one of the primary applications of cryptocurrency. Although centralized exchanges (CEXs) still handle the majority of volume, decentralized exchanges (DEXs) represent a growing segment of the market.
DEX trading volume peaked in mid-June before experiencing a noticeable cooldown. Currently, daily DEX volume remains below $100 million—a small fraction of the hundreds of billions traded daily on centralized platforms.
Among Ethereum-based DEXs, Uniswap V2 leads by a significant margin. The top six platforms by 24-hour volume are all automated market maker (AMM) pools, highlighting how blockchain technology is reshaping traditional trading and settlement mechanisms. Although order-book-based DEXs like Loopring have made technical strides, their daily trading volumes remain under $1 million.
Synthetic Assets Hit New Highs
Synthetix (SNX) was one of the top-performing assets of 2019, with SNX rising by 2,734% over the year. Users who staked SNX could earn nearly 100% returns in token terms. This strong performance continued into June.
After falling from $1.46 to $0.38 between year-end and Q1 2020—a drop of 74%—SNX rallied throughout June and reached new all-time highs.
Synthetix allows users to mint synthetic assets by staking SNX. These synthetic assets can be traded on synthetix.exchange and include crypto assets, inverse tokens, commodities, forex pairs, and indices. Notably, trading pairs linked to traditional indices—such as sFTSE (FTSE 100) and sNIKKEI (Nikkei 225)—have seen volumes exceed those of many general-purpose DEXs.
The Synthetix protocol has effectively opened the door to compliant crypto-based trading of financial derivatives. Its success has inspired other projects, such as Oikos (OKS), which is porting a similar model to the Tron network.
Cross-Chain Asset WBTC Grows by 126%
The expansion of DeFi requires a diverse set of monetary assets. Bitcoin, with its market cap exceeding $100 billion, represents a major source of value that can be bridged to DeFi platforms via cross-chain solutions.
Although cross-chain asset growth was slow throughout 2019 and early 2020, the total supply of Bitcoin-pegged tokens grew from 1,110 BTC at the start of the year to 11,773 BTC by the end of June.
This growth was initially driven by WBTC’s acceptance as collateral in MakerDAO. Later, the rise of yield farming on platforms like Compound, Balancer, and Curve further accelerated adoption.
WBTC—a collaborative initiative by BitGo, Kyber Network, and Ren—is the largest and fastest-growing Bitcoin-pegged asset. Its supply grew from 1,125 in early May to 8,690 by the end of June, representing a 126% increase in June alone.
Another notable project is renBTC, a trustless Bitcoin-pegged token launched by Ren Protocol. Although it has only been operational since late May, renBTC reached a supply of 1,082 BTC by the end of June, making it the second-largest cross-chain Bitcoin representation.
Leveraged Trading
Although open interest in decentralized leveraged trading reached new highs in June, growth in this segment was more modest compared to other DeFi categories. The Ethereum-based platform dYdX dominates this niche, accounting for 97% of the total open interest.
In June, open interest in leveraged trading positions increased from $26.51 million to $28.36 million—a gain of 6.98%.
Conclusion
The DeFi sector is currently experiencing its fastest phase of growth, with lending platforms like Compound leading the expansion. The rise of cross-chain assets such as WBTC and renBTC has also been remarkable, driven by strong demand for collateralized borrowing on Ethereum. WBTC supply grew by 683% in the first half of the year, while renBTC—despite its recent launch—already exceeds 1,000 BTC.
Among DEXs, AMM-style pools dominate trading volume, signaling a shift in how digital assets are exchanged and settled. Stablecoins also saw robust growth, with the total market cap reaching $12 billion. USDT, in particular, surpassed the $10 billion mark in June.
Frequently Asked Questions
What is Total Value Locked (TVL) in DeFi?
TVL represents the total amount of assets deposited in DeFi protocols. It is a key indicator of the sector’s growth and liquidity. Major assets locked include ETH, stablecoins, and wrapped tokens like WBTC.
How does yield farming work?
Yield farming involves supplying liquidity to DeFi protocols in exchange for rewards, often in the form of governance tokens. These incentives encourage user participation and can significantly boost platform liquidity.
What are the risks of participating in DeFi lending?
Key risks include smart contract vulnerabilities, volatile reward tokens, and shifting incentive structures. It's important to assess each platform’s economic model and security before participating.
Why are synthetic assets important?
Synthetic assets enable exposure to real-world assets—like indices, commodities, and currencies—without requiring direct ownership. They expand the utility of blockchain in global finance.
How do cross-chain assets like WBTC work?
WBTC is an ERC-20 token backed 1:1 by Bitcoin. Custodians hold the Bitcoin while issuing the equivalent WBTC on Ethereum, making Bitcoin usable in Ethereum-based DeFi applications.
What is the difference between AMM and order-book DEXs?
AMM DEXs use liquidity pools and algorithms to set prices, while order-book DEXs match buy and sell orders manually. AMMs have gained popularity due to their simplicity and continuous liquidity.