Decentralized finance (DeFi) protocols saw a surge in aggregate value trapped across different pools of bets in January. The value of assets traded in the market amounted to $74.6 billion, up 26% from December.

In its latest monthly report, DappRadar identified the growth of the DeFi sector along with renewable non-fungible token (NFT) markets which also saw a rise in trading volume and sales.

Optimism is emerging as the best performer for DeFi, which has seen a 57.44% increase in total value locked (TVL) at $808 million. Blockchain analyst Sarah Gergilas told Cointelegraph that the optimistic transaction volumes were likely driven by a “Learn to Earn” incentive program that ended in mid-January.

The sudden drop in daily transactions on January 17 suggests that educational incentive programs may play a role in driving DeFi adoption and adoption, Gergelas explained:

“By providing a hands-on learning experience, these incentives can help users gain a deeper understanding of DeFi technologies and the potential benefits they provide, thereby increasing the adoption and use of DeFi products and services.”
Solana saw a 57% increase in TVL to $548 million, driven by Marinade Finance’s introduction of a token incentive scheme that rewards SOL depositors with mSOL derivatives. The protocol reached US$152 million between December and January.

Not all is positive for the Solana ecosystem, however, with platform Everlend announcing its shutdown on February 1, citing a lack of cash to shut down its service.

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Related: NFT Sales Exceed 101 Million in 2022: DappRadar Report

The upcoming Ethereum upgrade in Shanghai is also raising the stakes in DeFi due to the expected opening of withdrawals from staking Ethereum contracts. Lido Finance Maker overtook DAO as the top DeFi protocol in January, driven by the popularity of liquid staking derivatives protocols.

According to Gherghelas, Lido’s liquid fixing solutions have proven to be a major draw card for users looking to maximize storage returns.

“What sets Lido apart from other DeFi protocols is its innovative staking solution, which allows users to access liquid staking Ether without committing to the traditional minimum of 32 ETH.”
Lido has seen more than $8 billion worth of value locked into its platform, up over 36% since December 2022. Gherghelas highlighted the recent rally in the cryptocurrency markets that has contributed to DeFi’s increased TVL:

“The cryptocurrency market has been bullish, which has led to increased investor confidence and an influx of capital into the DeFi space.”
NFTs also enjoyed a fresh start to the year. Trading volume reached $946 million, marking a 38% increase month-on-month and the highest volume since June 2022.

Ethereum continues to dominate the NFT market, accounting for 78.5% of the total trading volume of $659 million in January. Yuga Labs had a good month, with $324 million in turnover from its exclusive collections.

NFT groups DeGods and Monkey Kingdom helped increase NFT trading volume by 23%. Meanwhile, Polygon saw a huge 124% jump in its NFT trading volume and total sales of 4.5 million NFTs, driven in part by Collect Donald Trump cards.