- DeFi total value locked is now well over $20 billion
- The bull run of the crypto industry has played a role in the growth of the sector too
DeFi Pulse have just recorded that the total value locked in the decentralized finance (DeFi) sector has reached an all-time high of $23.12 billion. DeFi Pulse is an analytic site that tracks the DeFi industry generally.
According to data from the site, the majority of assets were locked on platforms like Maker (MKR), Aave (AAVE) and Uniswap (UNI), who along with Compound and Synthetix ranks as the top 5 protocols of the industry.
The rise in total value locked has also coincided with the bull run of the crypto industry which has seen the value of Bitcoin reach well over $40k while that of Ethereum has also risen to over $1300. The wider crypto industry has been on a bull run all-year long with the market appreciating massively.
Some analysts have, thus, tied the rise in DeFi TVL with the incredible run of the crypto market. A tweet from Mati Greenspan, the founder of Quantum Economics noted that whenever the price of Ethereum rises, it usually takes all of the market built on the network high too.
Will 2021 be the year of DeFi?
2020 was undeniably the year that the DeFi industry got into the view of the public. As of the beginning of last year, the total value locked in the space stood at a paltry $1 billion, presently, that value is now well over $20 billion.
And since the majority of the system is built on the Ethereum network, the rise in price of the crypto asset has always had a ripple effect on the industry.
Decentralized finance generally deals with the implementation of conventional financial services on a decentralized platform. These platforms remove the need for a central body like banks or exchanges to carry out transactions, rather, these transactions are carried out on peer-to-peer applications that are dependent on the users.
Dapps allow for the issuance of loans, receiving of such loans, providing and receiving insurance and some other financial activities.