Decentralized finance (DeFi) was one of the main factors that pushed the crypto market higher throughout 2021 and to date, platforms like Uniswap (UNI), SushiSwap (SUSHI) and Aave (AAVE) form the bedrock of the sector.

Similar to altcoins, DeFi tokens took a severe beating as Bitcoin price corrected from its $65,800 all-time high, and data from Cointelegraph Markets Pro and TradingView shows that since DeFi index perpetual futures contract hit a low of $5,340 on July 20. Since then, the value of the index has rallied by 45% to $7,682 and this has analysts watching to see if a reversal is in order.

Total value locked reverses course

In DeFi, the total value locked (TVL) is a platform or the sector as a whole is used to determine the strength and weakness across all platforms. 

While this metric is still down roughly 30% from its all-time high of $154.91 billion, the metric did increase from $3 billion in July 2020 to $111.04 billion by July 2021.

Out of the top 20 DeFi platforms, the largest percentage growth in TVL over the past seven days was a 68% increase on the Flexa (AMP) protocol and a 38% increase on Lido (LDO).

DeFi tokens rally as user activity surges

Further evidence of the ongoing rebound in the DeFi sector can be found in the rising token values of some of the up-and-coming protocols.

Out of the top 20 DeFi protocols according, LUNA and AMP were the two biggest price gainers over the past seven days with increases of 83% and 64% respectively.

While the daily trading volume seen across decentralized exchanges has remained relatively flat below the $2 billion level for the past month, the price of Uniswap rose by 17.8% and SushiSwap rose by 21.5% between July 21 and July 27 and user activity appears to be on the uptrend. 

Continued increases in the number of new users interacting with DeFi protocols is another sign of the growing strength of the sector, with a record 2.091 million unique addresses interacting with a DeFi protocol as of July 27.

Altogether, these developments have caught the attention analysts and investors who are hoping for a ‘DeFi Summer 2.0‘.

With DeFi tokens in general showing a little strength again from the recent crash, feels like we might get #DeFiSummer 2.0

— danso.eth (@samueldans0) July 6, 2021

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.