The amount of money locked in decentralized finance (DeFi) contracts has just blasted through $900M — nearly reaching $920M at the time of publishing.
DeFi is increasingly looking like it will be the main driver of Ethereum’s growth as its funds continue to increase. Just days ago, BeInCrypto reported that there was $852M worth of funds invested, in a new all-time high. This record has now been shattered yet again, with total funds locked in DeFi now topping $920M.
As Mati Greenspan tweeted earlier today, DeFi is now quickly getting close and closer to the $1B milestone. Once this is reached, it may open the floodgates for fresh money to enter this budding ecosystem.
The amount of money locked in #DeFi contracts just blasted through $900 million.
We're going to a billion baby!! pic.twitter.com/RDU9TMcOwW
— Mati Greenspan (tweets ≠ financial advice) (@MatiGreenspan) February 2, 2020
DeFi has exceeded all expectations thus far in 2020. For comparison, the number of funds locked away was just $600M in mid-December. The push is being led by Maker DAO, the lending project which makes up some 57% of all DeFi funds. Other DeFi products like crypto-derivatives also play a major role in this budding Ethereum-led ecosystem.
The optimism around DeFi has caused some analysts to predict that it will be the driver of ‘parabolic growth‘ in 2020 and beyond. The spike in use has followed a slow uptick in Ethereum’s price as well. In the past month, the leading smart contract platform has climbed from $132 in early January to its current price point of $188. Once it hits the $1B milestone, total funds locked in this sector will equal around 5% of Ethereum’s entire market capitalization.
The momentum is good news for both Ethereum and the future of cryptocurrency-based financial markets. DeFi posits itself as an alternative to traditional finance, but it has a long way to go before making itself accessible enough for everyday financial traders. Still, more money locked into DeFi will inevitably bring more attention to it — and that should ultimately give Ethereum the bump that many have been waiting for.