Large Institutional Transactions Push Total Value Locked in DeFi to $239B

The growth has come despite a series of high-profile hacks that resulted in the loss of hundreds of millions of dollars

article-image

Source: Shutterstock

share

key takeaways

  • Transactions of more than $10 million became the largest segment of DeFi transactions by volume
  • Hackers made off with $3.2 billion in cryptocurrency in 2021, according to Chainanalysis

Total value locked in DeFi increased from $601 million at the start of 2020 to $239 billion so far in 2022, a nearly 40,000% rise, according to a new research report.

The report’s author, blockchain data provider Amberdata, said the massive rise is “still in the early stages,” adding that total value locked (TVL) should “increase dramatically” in the next few years as institutions enter the market.

Large institutional transactions, which blockchain analytics company Chainalysis defines as above $10 million, became the biggest segment of DeFi (decentralized finance) trades by volume beginning in the fourth quarter of 2020 and grew to over 60% of transaction volume by the second quarter of 2021, according to the company. 

Even as more capital floods DeFi protocols, the industry remains vulnerable to hacks. In 2021, hackers made off with $3.2 billion in cryptocurrency, according to Chainanalysis data.

Ronin Network, an Ethereum-linked sidechain used for blockchain gaming group Axie Infinity, was breached in late March for roughly $600 million, or 173,600 ether, as well as $25.5 million USDC. Federal investigators later confirmed that North Korea-based hacker Lazarus Group led the hack.

DeFi protocol Wormhole suffered a $326 million hack in February — then the second-largest such incident to date. The largest hack in DeFi, and all of crypto, is still the August 2021 $600 million Poly Network hack.

The crime was attributed to a figure that went by the name “Mr. White Hat,” who, in an interesting turn of events, was later offered a security position at the interoperability protocol.

Despite mounting security concerns, researchers at Amberdata insist use cases for DeFi technology are only just emerging, particularly when it comes to financial infrastructure and efficiency. 

DeFi can offer new solutions for data storage, meaning financial services companies could save resources on infrastructure development, the Amberdata report said. 

“For example, a retail bank that maintains ATMs and branches needs to maintain data connections between those endpoints, its corporate offices, and the data center(s) where that data is stored,” researchers wrote. “This bank could leverage a DeFi solution on a private blockchain that reduces data center needs only to what is necessary to maintain blockchain nodes.”

DeFi-enabled smart contracts can also speed settlement times and support complex financial transactions, researchers added.

“In 2021, the global financial services market was estimated to be worth more than $23.3 trillion, meaning that at present, DeFi accounts for about 1% of the total,” the report said. “An increase to just 5% would see over a trillion dollars flow into the space.”


Get the news in your inbox. Explore Blockworks newsletters:

Tags

Upcoming Events

Old Billingsgate

Mon - Wed, October 13 - 15, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

Industry City | Brooklyn, NY

TUES - THURS, JUNE 24 - 26, 2025

Permissionless IV serves as the definitive gathering for crypto’s technical founders, developers, and builders to come together and create the future.If you’re ready to shape the future of crypto, Permissionless IV is where it happens.

Brooklyn, NY

SUN - MON, JUN. 22 - 23, 2025

Blockworks and Cracked Labs are teaming up for the third installment of the Permissionless Hackathon, happening June 22–23, 2025 in Brooklyn, NY. This is a 36-hour IRL builder sprint where developers, designers, and creatives ship real projects solving real problems across […]

recent research

Research Report Templates.png

Research

Ethena Labs is leaping from its flagship synthetic dollar, USDe, to a full product suite—USDtb, iUSDe, and the Arbitrum-based Converge Chain—designed to marry crypto-native yields with TradFi-grade compliance. Our analysis shows how expanding into CME, ETF options, and tokenized Treasuries could lift protocol revenue from sub-$500 million in a bear case to several billion dollars if favorable regulation and institutional adoption align.

article-image

Doing one thing well and leaving everything else out is often what disruptive technologies do best

article-image

Why an analyst is kicking off COIN coverage with “buy” rating

article-image

“Bitcoin does not require a strong equity rally to move higher,” YouHodler markets chief Ruslan Lienkha said

article-image

President Trump’s comments that he will not look to fire Fed Chair Jerome Powell sent stocks higher in after-hours trading Tuesday

article-image

The trading card game will use Immutable’s zkEVM chain