DeFi’s 5x TVL Surge: Fueling Crypto Rally, or Exacerbating Weakness?

DeFi has experienced a remarkable rebound, with total value locked (TVL) surpassing $160 billion—a record high since May 2022. This surge is fueled by borrowing and lending protocols like Aave, Lido, and EigenLayer, attracting investors seeking higher returns. However, this resurgence brings questions: Is DeFi bolstering crypto rallies, or creating more volatility? The answer lies in the interplay of leverage and price fluctuations.