Taiko, an Ethereum Layer 2 network, has recorded a remarkable 1,000% increase in total value locked (TVL) over the past month, pushing its TVL to a new high of $81 million.
High Demand for Taiko’s DeFi
The surge in Taiko’s TVL reflects growing investor interest and increased activity across native decentralized finance (DeFi) applications, including decentralized exchange (DEX) Panko Finance and lending platform Avalon Finance, each surpassing $30 million in TVL.
The escalating TVL indicates a strong attraction to Taiko's Layer 2 DeFi protocols, offering lower costs and faster transaction speeds compared to the Ethereum mainnet.
Transaction Volume Sets New Records
The network also achieved an all-time high daily transaction volume on November 4, 2024, with over 5 million transactions processed. This milestone highlights the demand for Taiko’s scalable infrastructure, which provides efficient, cost-effective transactions—essential features driving user migration to Layer 2 networks like Taiko. The network’s ability to handle high transaction volumes while maintaining low fees is seen as a critical factor in its recent growth.
Panko Finance Fuel Network Growth
Taiko’s rapid expansion can be largely attributed to its native DeFi protocols. Panko Finance, a leading DEX on the network, has quickly gained popularity since its mid-October launch, amassing over $3 million in trading fees within a 24-hour period. With a Uniswap v3-based architecture, Panko offers liquidity pools primarily dominated by Bitcoin-related tokens from Solv Protocol, capturing around 90% of deposits on the platform. The token pairs in these pools reflect Taiko’s strategy to cater to diverse DeFi users by providing yield-bearing and liquid staking assets, further increasing its appeal.
Avalon Finance Contributes to Network Growth
Avalon Finance, Taiko’s primary lending protocol, has also contributed significantly to the increase in TVL. Offering collateral-based loans in major assets such as USDC, ETH, and TAIKO, Avalon has seen a steep rise in usage, driven by the network’s low transaction costs and interest rates favorable to both borrowers and lenders. This trend underpins the growing adoption of Taiko’s DeFi ecosystem by users looking for alternative lending solutions.
Additional Contributors to TVL Growth
Beyond Panko and Avalon, TakoTako, Taiko’s largest lending application, has also played a role in the network’s expanding TVL. With ETH and USDC as the primary collateral assets, TakoTako offers low annual interest rates, appealing to users seeking affordable borrowing options. The platform’s modest returns for lenders have not deterred participation, as evidenced by its steady contribution to Taiko’s overall TVL.
Outlook for Taiko and Layer 2 Ecosystems
As Layer 2 solutions continue to address Ethereum’s scalability challenges, Taiko’s growing user base and DeFi activity position it as a competitive player in the DeFi space. By facilitating high transaction throughput and attracting substantial TVL, Taiko is well-positioned for sustained growth and broader adoption. The network’s development underscores the potential for Layer 2 ecosystems to secure capital and increase DeFi engagement, paving the way for continued expansion in the sector.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
