Welcome to Finance Redefined, your weekly digest of essential decentralized finance (DeFi) insights—a newsletter tailored to deliver the most significant developments from the preceding week.

The recent surge in DeFi witnessed a notable uptick in decentralized application (DApp) activity, which soared by 77% in the fourth quarter of 2023, accompanied by a seven million total daily active user wallet count.

The European Commission is currently evaluating the DeFi industry and may introduce licensing requirements for protocols in the near future.

Analysts from investment manager VanEck predict that Ethereum layer-2 scaling networks could achieve a $1 trillion market capitalization within the next six years.

Despite these optimistic projections, the top 100 DeFi tokens experienced a bearish week, with most tokens trading in the red on the weekly charts. Moreover, the total value locked in DeFi protocols remained below the $100 billion mark.

According to DappRadar's latest report, the first quarter of 2024 displayed several bullish indicators for the DApp and Web3 sectors, with a significant quarter-over-quarter increase in usage and a seven million total daily active user wallet count, marking the highest adoption rates since 2022.

The impending regulatory framework in Europe, known as the Markets in Crypto-Assets Regulation (MiCA), could potentially restrict non-decentralized DeFi protocols as the European Commission assesses the decentralized finance market and evaluates the feasibility of specific regulations for the sector.

VanEck's analysts anticipate substantial growth for Ethereum layer-2 scaling networks, attributing their success to the alleviation of Ethereum's scalability issues. However, concerns have been raised about the crypto activities of AssangeDAO, with analysts urging caution and comprehensive due diligence.

Overall, data from Cointelegraph Markets Pro and TradingView indicates a bearish sentiment in the DeFi market, with most of the top 100 tokens trading in the red on the weekly charts and the total value locked in DeFi protocols remaining below $100 billion.