Decentralized Finance (DeFi) has been a steadily-growing trend in the digital asset industry, recently reaching new highs in terms of the amounts that have been locked away.
DeFi adoption exploded in 2019 and recent trends indicate that adoption will continue to grow in 2020. In fact, it has just broken a new record in 2020 and now boasts around $852.1M in USD locked into its contracts. As BeInCrypto previously reported, this number stood at just $600M in mid-December.
DeFi Breaking Records
The new all-time high on was recently brought to crypto-Twitter’s attention by analyst Mati Greenspan (@MatiGreenspan).
Although DeFi has been around since at least late 2017, its real growth only began in the past year. Ethereum has been leading the charge in this domain with the hopes of moving traditional financial assets over to the cryptocurrency world.
— Mati Greenspan (tweets ≠ financial advice) (@MatiGreenspan) January 30, 2020
This new trend of ‘crypto-finance’ seeks to disrupt the entire industry of financial trading. It’s a tall order, but growth already seems promising — especially considering that the amount of funds locked has doubled since April 2019.
Ethereum Continues to Dominate
Analysts continue to make the case that DeFi will only see more growth in 2020. As of now, the most popular DeFi application is by far the Maker DAO lending project. Around 2.4M ETH is locked into the decentralized credit platform.
Derivatives platforms like Synthetix are also finding their own niches in the DeFi world. Widespread optimism in this sector has analysts claiming that we can expect ‘parabolic growth’ as many other cryptocurrency projects transition to DeFi.
DeFi has also been the main catalyst for the increase in new addresses on Ethereum in the past few months. As BeInCrypto reported last December, excitement over DeFi and the Istanbul update brought in 38,000 new addresses in a day.
Still, although Ethereum is leading the DeFi charge, it is still far from its all-time high in price. Currently trading at $176, the leading smart contract platform is still under where it was just three months ago. It will need to solve its scaling issues if it wishes to truly bring its DeFi platforms mainstream, however, solutions on that front still appear to be a few years away.