The total locked value (TVL) in decentralized smart contracts, which averaged $ 2.5 billion on July 15, 2020, has increased by 89% in six months to the current TVL of $ 23.2 billion, according to data from the leading site in the network. DeFi DeFiPulse metrics.
Decentralized Finance (DeFi) is a rapidly growing sector of the cryptocurrency market and accounts for approximately 2% of the total market capitalization of $ 1.04 trillion. DeFiPulse provides data through different types of decentralized applications, including loan dApps, derivative service dApps, payment dApps, asset dApps, and decentralized exchanges (DEXES).
In the top position, Ethereum-based Maker has $ 4.26 billion in TVL, followed by Aave, Uniswap, Compound, Synthetix and Curve Finance with TVL of $ 2.99 billion, $ 2.78 billion, $ 2.73 billion, $ 2.33 billion, and $ 1.98 billion, respectively.
In the last three months, Maker, Aave and Compound were solely responsible for add $ 6.32 billion in TVL to the DeFi sector. As a leading dApps development platform, Ethereum is the mother of all decentralized applications right now, even with increasing competition from other blockchain ecosystems like Cardano, EOS, Polkadot, and Tron.
The DeFi sector will grow exponentially
DeFi is disrupting traditional finance and forcing governments and traditional financial institutions to realize how people are moving liquidity in and out of peer-to-peer financial platforms.
DeFi applications are in an early stage of development, as is evident from the high level of technical knowledge that is required to safely participate and navigate different dApp environments. However, the high level of innovation and practicality of existing and future DeFi dApps has played an important role both in advancing crypto regulations and in investing interest in the cryptocurrency market.
In particular, Stablecoins, which are the most popular digital assets in many DeFi dApps, can now be held in federal savings associations and national banks after receiving the green light from the US Comptroller of Currencies (OCC).
According to DeFiPulse, the high growth rate in the DeFi sector is capable of growing by 9% more to $ 25 billion by the end of the week.
ETH-based DApps vs ETH 2.0
Most of the best performing DeFi DApps are based on Ethereum, which is in the midst of a major transition from proof of work to proof of stake consensus protocol, among other updates.
The transition will affect all ETH-based DApps and ultimately their performance will be based on the success of the full implementation of Ethereum upgrades, which will occur in phases.
Such dApps have the option to continue operating on ETH 1.0, but will have to migrate to Ethereum 2.0 in the end, due to issues such as scalability and governance mechanisms. Synthetix, the most popular derivatives liquidity protocol on DeFi has already published its optimistic migration plan to ETH 2.0.