Ethereum's decentralized finance (DeFi) ecosystem has experienced substantial growth, with the total value locked (TVL) in DeFi protocols reaching approximately $138 billion as of July 22, 2025. This marks a 57% increase from April's $87 billion, indicating a robust recovery and expansion in the DeFi sector.
Leading this growth, Ethereum's Layer 1 network holds a dominant position, accounting for 55% of the total TVL in DeFi. This dominance is attributed to Ethereum's established infrastructure, institutional adoption, and regulatory clarity in key jurisdictions. Notable protocols contributing to this growth include Aave, Lido, and EigenLayer.
In addition to Ethereum's Layer 1 network, Layer 2 solutions have also played a significant role in the DeFi resurgence. Arbitrum, for instance, has seen its TVL increase to $2.5 billion, reflecting a 30% rise in its Ethereum-based TVL. This growth is driven by scalability improvements and increased user engagement.
Furthermore, the integration of stablecoins has been a pivotal factor in Ethereum's DeFi growth. Automated bots have facilitated a substantial volume of stablecoin transfers on Ethereum's Layer 1 blockchain, with $480 billion transacted in May 2025. This activity underscores the network's capacity to handle large-scale transactions efficiently.
Overall, Ethereum's DeFi ecosystem continues to expand, driven by technological advancements, increased institutional interest, and a growing user base, solidifying its position as a leader in the decentralized finance space.