The decentralized finance (DeFi) market has experienced a resurgence in Q4 2023, with the total value locked (TVL) reaching $53 billion, a YoY increase of about 36%. This recovery comes despite challenges faced by the crypto industry, such as the collapse of FTX in November 2022. However, experts believe that for the DeFi market to reach its full potential, it needs to enhance its cross-chain transaction capabilities.

Interoperability is essential for the continued growth and widespread adoption of DeFi, as it opens up opportunities for more diverse and robust financial services. Projects like RocketX and the FIO protocol are working on DeFi-centric blockchain interoperability solutions. With a compound annual growth rate (CAGR) of 46.0% from 2023 to 2030, the DeFi market is set to expand, and increasing institutional adoption is expected. To truly flourish, the DeFi space needs to achieve a heightened level of cross-chain interoperability.