DeFi Total Value Locked Tops $6 Billion Milestone

Share Article
In Brief
The Trust Project is an international consortium of news organizations building standards of transparency.

Decentralized finance projects keep gathering momentum. Many are attributing the current bull market to the boom in popularity of these protocols. From high-interest earnings to yield farming, we may be witnessing how DeFi takes over crypto.

Sponsored



Sponsored

Just two weeks ago, total value locked (TVL) on all DeFi protocols combined reached $4 billion. Today, that number has topped the $6 billion mark, adding an average of one billion dollars per week.

DeFi Total Value Locked reaches $6 billion. Source: DeFi Pulse

Is This the Beginning of the DeFi Bubble?

It’s hard not to compare the current market sentiment with the late 2017 ICO-mania. Back then, a small team with a flashy website and well-edited whitepaper could grab millions through an initial coin offering.

Sponsored



Sponsored

Many cryptocurrency and financial analysts are already calling this a DeFi bubble, although the general belief is that total valuation is still too small to cause a major crash. Alex Svanevik, CEO of blockchain analytics company Nansen says:

Basically a worst-case scenario for DeFi is the ICO bubble of 2017 combined with the Great Financial Crisis of 2008. It’s also quite different from the 2017 ICO bubble in a few key ways.

He added:

It has a much more bottom-up distribution, and in fact, there are signs that retail investors managed to move ahead of the whales on this one, in stark contrast to the ICO boom where whales were getting sweet deals behind the scenes.

Crypto seems more mature now after the multi-year bear market, but the euphoria is causing plenty of dubious projects and scams to pop up.

The High Price of Success

One of the classic symptoms of bull market euphoria is that almost every day we have a new hot project that attracts all eyeballs. Among last week’s big winners were LINK and BAND, as well as experimental DeFi tokens like YAM.

Top-10 DeFi projects when TVL reached $6 billion. | Source: DeFi Pulse

A great part of this boom relies on the Ethereum network, which is getting clogged and expensive. The possibility of launching any token on Uniswap and accessing a big liquidity pool is causing gas prices to skyrocket.

To the boom in DeFi projects and the decentralized oracles craze, we may soon see strong competition between decentralized exchanges:

New projects are coming up to challenge Uniswap’s dominance. BeInCrypto recently reported about 1inch exchange and Dharma, both of whose value propositions revolve around cheaper gas fees.

This may add fuel to the current uptrend in the crypto market. DeFi is growing, and those projects need oracles and decentralized exchanges. There is still lots of value sitting idle in crypto wallets, especially in Bitcoin, Ripple, Bitcoin Cash, Litecoin, and EOS.

Disclaimer

All the information contained on our website is published in good faith and for general information purposes only. Any action the reader takes upon the information found on our website is strictly at their own risk.
Sponsored
Share Article

Tony has worked for several financial companies in London during the last seven years, gaining experience in traditional finances and trading. Passionate about direct democracy, digital rights and privacy, he has been involved with cryptocurrency since 2013.

Follow Author

$200 reward waiting for you — Deposit, Trade, Follow and Claim today!

Discover

Limited offer! Learn to mine and trade crypto today for free

Go