The value of locked-in assets (TVL) in decentralized finance (DeFi) continues to soar.
This coincides with the major growth in the price of Ethereum.
DeFi players recorded an additional $ 3 billion in value across all platforms on January 3, an amount nearly five times the overall DeFi market at the start of 2020.
Ethereum’s recent record high bodes well for the entire DeFi system, helping it surpass the $ 30 billion mark.
Now approaching $ 32.5 billion as Ethereum prepares to test the $ 1,700 level, DeFi continues to explode. This coincides with a size growth of some of the best DeFi platforms.
Tokens like UNI and AAVE are also breaking their record highs. More and more people are flocking to alternative financial systems that offer better borrowing and lending rates.
Even though Ethereum transaction fees have reached record highs, use of the DeFi platform has continued to increase.
DeFi: The decentralized takeover of finance
A year ago, the TVL (total locked-in value) in DeFi was well below $ 1 billion. It has since increased by more than 4,500%.
On February 3, DeFi’s daily growth value increased by about $ 3 billion. This is significantly larger than the size of the entire market not too long ago. There are several reasons for this growth, the current social and economic difficulties being one of the first examples.
With rising inflation and in some cases complete lack of access to a functioning financial system, decentralized finance offers a user-centric alternative. These platforms are permissionless and provide greater value propositions than their traditional counterparts.
Some of the most popular cases of DeFi are trading platforms, lending and borrowing, interest, and insurance-type risk management.
New alternatives focused on users
However, even without focusing on the nature of DeFi, the offer is enough to convert savvy users to this new ecosystem.
Maker DAO , the best DeFi platform with almost $ 6 billion locked in, offers hugely beneficial lending options. Users can lend or receive a loan, turning users into stand-alone banks that can earn interest or borrow at competitive rates.
In addition, there are also options like Uniswap, the largest decentralized exchange (DEX) in the market. Uniswap, has succeeded in transforming ICOs ( Initial Coin Offering ) and centralized token launches based on exchange.
With a DEX, any project can instantly list their token and provide cash as a market player. This allows the entire life cycle of transactions to take place without paying exorbitant fees to exchanges to get a project listing.