The DeFi Sector Map

Key Insights

• DEXs are the highest-grossing DeFi sector, accounting for nearly half of all DeFi revenue.
• Despite having nearly 25% more TVL than DEXs, Lending protocols earn nearly a quarter of the revenue and thus return significantly less per unit of TVL.
• Perpetual exchanges are emerging as users’ preferred leverage mechanism over money markets. Volumes on perpetual exchanges increased by 20% year-to-date while lending borrow volume decreased by nearly 50%.
• Due to their capital structure, derivative protocols return 4–9 times more in revenue per unit of inventory (TVL) compared to the rest of DeFi sectors.
• Liquid Staking Protocols (e.g., Lido) is the fastest-growing sector in terms of TVL, adding over 50% in the last 90 days while DEXs and Lending both decreased by over 14%.

DeFi is crypto’s largest and longest-standing application vertical. Its market cap, excluding stablecoins, stands at roughly $70 billion which is 10% of Layer-1 tokens. Given DeFi’s foundational role within crypto, understanding the variety of sectors within DeFi and how they are changing provides valuable context for navigating crypto going forward.