$20 Billion DeFi Surge Raises Red Flags Over Price Inflation

Crypto's $20 billion DeFi surge may have been driven by price inflation rather than fresh deployable liquidity, according to recent data.

A snapshot of DeFiLlama's chain data on September 15 showed that Ethereum's dollar-denominated DeFi total value locked (TVL) increased by 21.38% over the past 30 days, while Solana's TVL rose by 22.94%. However, stablecoin growth trailed behind, with Ethereum's stablecoin market cap increasing by only 0.68% and Solana's rising by 5.51%.

The native assets of both chains, ETH and SOL, outpaced their respective TVL increases, with ETH gaining 32.80% and SOL rising by 34.67%. This suggests that revaluation may have played a significant role in the increase in TVL.