Major Recovery in the first half of 2023: Can DeFI end the year on a high?

Nagaya Technologies
6 min readSep 2, 2023

2023 so far has brought a much-needed uptick in the DeFI Space and with it new expectations for the times to come. We have seen a major rise in the activity within the DeFI Space despite major parts of the world still dealing with the aftereffects of the pandemic. Although the events of 2022 are so long gone in memory, their repercussions continue to provide a stern test to the resilience of the DeFI Space in 2023. So are the recoveries within the DeFI Space in the first half of 2023 here to stay? And how optimistic can we be for the 2nd semester of 2023 and beyond?

Are we back in the “To The Moon” phase?

2021 was probably the best time for DeFI Space as we were officially in the “To The Moon” phase as everybody called it. The hype of the DeFI Space was at an all-time high as everybody is desperate to join in before it was too late and development was going on at a very rapid pace. So great was the hype at this time that worthless coins like Squid Game and Shiba Inu were increasing by 1000% in a matter of hours. The year was truly the coming of age for digital assets and its worldwide community which managed to push this hype to astronomical levels.


2021 also marked the introduction of many new developments in the DeFI Space such as NFT and Metaverse which managed to bring in a lot of interest from institutions. Of course, this hype was eventually over as 2021 came to a close but it was an important part of the DeFI Space. 2021 also in a way exposed a lot of the bad aspects of the DeFI Space with volatility and speculation bringing major collapse in 2022.

Fast forward to the first semester in 2023 and we might see a remarkable recovery within the DeFI Space from its long drawn-out winter phase. We see the value of market leaders Bitcoin and Ethereum mount a rebound by more than 50% from their 2022 figures. With this, we also see a slight recovery in the total market cap as it manages to creep back to $1 Trillion in 2023. The NFT market also registered an increase of 38 and 42% from its December figures at $946 million in trading volume and 9.5 million in sales count.

We can also take some positive notes on the growing number of Users within the Crypto Space which is at 320 Million so far and expected to reach the 1 billion mark within a couple of years. This growth is also fueled by the rising global crypto adoption index around Asia and Southeast Asia region as countries like Vietnam, India, and Pakistan are amongst the top 10. These should be enough to carry the momentum throughout 2023.

We are certainly not yet in the “To The Moon” phase of 2021 but 2023 still poses a decent recovery so far for optimism to grow in the years to come. The ETF also became a topic to be discussed in 2023 as Blackrock aims to introduce its own Bitcoin Spot ETF which is awaiting an SEC ruling in September. Other institutions such as Barclays and Citigroup are also showing interest to come back to the DeFI Space which should also benefit the community.

Of course, when we speak about Recovery there is also much recovery that happens within the regulation that governs the DeFI Space. 2023 also marked the year when many of the institutions frequently came in contention with the SEC such as Coinbase, Binance, and Ripple. Even though the crypto regulation in the USA still faces a lot of uncertainty, the EU managed to swoop in with the MICA Bill that adopts a balanced approach with the DeFI Ecosystem and should encourage the growth of the space within the EU Region countries.

There is also a recovery with the Total Value Locked within the DeFI Platforms as it saw an increase of 19% within the first quarter of 2023. This was fueled by recovery in platforms such as Lido and MakerDAO which was severely affected by the collapse of Celcius in Q3 of 2022. This also will fuel a boost in returns received by these DeFI platforms as forecasts of triple-digit percentage growth with a target of $16.9 billion as of 31 December 2023 and a gradual increase year after year.

According to the REKT database, January 2023 also poses the lowest number of blockchain exploits resulting in a total loss of $14.6 Million with the majority happening on the BNB chain. It also poses a continuous positive trend for the blockchain industry as this means better security is in place to protect the users and their digital assets. This will be an important factor for the DeFI Space moving forward as firms like Certik and Hacken will also need to up their game.

Much of the recovery within the DeFI Space in 2023 is also attributed to the external factors within the economy as the world seems to recover from the pandemic. We have seen inflations and recessions happening in countries such as Pakistan and Turkey which increase the amount of users within the area. We also see many ditch their dependence on the US Dollar and adopt other alternatives with one of them being stablecoins and Bitcoin.

It has been a slow path to recovery but much of the signs are there for DeFI to thrive in 2024 and beyond. There are also many challenges upcoming in the years to come with Bitcoin halving coming fast and quick but the community should generally be more optimistic towards Q4 of 2023. If we look upon history when Bitcoin price rises generally the DeFI Space continues and we can realistically expect the trend to continue.

Many Reasons for Optimism….

There are always many reasons for optimism in the DeFI Space as it has gone through plenty of crashes before and recovered even stronger. It seems like the growth we are currently experiencing is much more sustainable than the one experienced in 2021. 2021 saw a growth fueled mainly by speculation and that’s why it quickly unraveled in 2022 but in 2023, we see a defi space that probably has learned the lesson as regulation becomes more stringent.


The regulation also eases the adoption of DeFI Space which means less of a gray area that is much of the confusion in 2021. It also installs trust in people that the government is working closely to ensure that the DeFI Space is operated efficiently. This is visible through the ruling between SEC and Ripple which managed to spark huge growth in Ripple and its ecosystem. With this, we also need to wait for the Regulations of the DeFI Space in the USA as it will likely form a benchmark for other regulations.

DeFI has also shown a level of maturity in 2023 so far as gone are the days where volatility will jump off your seat. It is not perfect as there is the emergence of new generations of meme coins but the crashes from tokens like Squid Game or Terra Luna have made the users smarter in terms of expectations within these tokens. With this, we also see new forms of digital assets that have proper fundamentals and legality as assessment from the community becomes more advanced.

All in all, DeFI Space will not possibly fade away just because of a bad year in 2022 and some communities want to steer this space into a better outlook in 2024 and beyond. With better regulation and better projects going in the DeFI Space, it is quite achievable for the space to surpass its 2021 achievements. The question remains is who will take the leap forward as we approach the end of 2023? Which project will go to the moon in the years to come? Let us know in the comment below!

We at Nagaya Technologies are really excited about the recovery that is happening within the DeFI Space throughout 2023. We hope that beyond Nagaya can help boost growth within the DeFI Space and become a sustainable asset for the global community. Nagaya in itself is the World’s First Hybrid Digital Asset that has gold to back up its intrinsic value and maintain growth for the long term. Interested to know more about Nagaya, you can visit our website at

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Nagaya Technologies

NAGAYA (NGY) is a Gold-Backed Cryptocurrency with Subsidiary Projects. We aim to build Trust and Value through LEGALITY and TRANSPARENCY.