Decentralized finance (DeFi), the idea that decentralization can stretch to traditional finance and still not be hindered or affected by any centralized government has, since the start of this year, been making rounds in the cryptocurrency space.
Even though new and emerging cryptocurrency innovations usually stir a lot of hype, which can sometimes inflate and exaggerate the value of said innovation, many would argue DeFi is deserving of its day to day popularity in the crypto-space.
DeFi overall Value crosses $3 billion
Among many other achievements, the locked value of DeFi applications combined together has generated a total of $3.23 billion. What this means is that both smart contracts, Decentralized applications (dApps), and all other protocols built on the Ethereum network now amount to $3.23 billion in value.
The speedy growth of DeFi is extremely remarkable, especially because the numbers were at $2.74 billion in the past four days, which means that in those four days, DeFi added $390 million to its value.
MakerDAO takes the lead
As seen on Defi Pulse, a site that monitors each protocol’s underlying smart contracts on the Ethereum blockchain. The list includes the 35 existing DeFi applications which make up these numbers. And on the top of the list is MakerDAO, the decentralized credit platform on Ethereum that supports Dai, a stablecoin whose value is pegged to USD.
Maker has been topping the list since last year and has remained untouchable, with the highest locked value of $654.6 million. Five months ago, the total value for MakerDAO was $597.1 million.
What Could be the total value of DeFi in the next few years?
If DeFi’s adoption continues to imitate this pattern, MakerDAO could realistically cross $700 million to $800 million in value before the end of 2020.
Keep in mind that this also places MakerDAO on the path to being valued at $1 billion; a milestone that would increase the dominance of DeFi. If this happens, the overall value could be heading to $5 billion in less than two years, all of which echoes the fact that DeFi just might be here to stay.
Compound, Synthetix, Aave, and Curve Finance are the four other DeFi applications that make up the top four, following MakerDAO.
How the Numbers are Calculated
As noted by the site, the overall value is calculated by the addition of the total balance of Ether (ETH) and ERC-20 tokens held by smart contracts. Trading volume (TVL) is calculated by multiplying the balance by their USD prices, this is done on an hourly basis.
The Future of Ethereum and DeFi
At press time, Ethereum (Ether) is priced at $243.80, a fairly good price that contributes to this milestone. Ethereum 2.0, as explained by Vitalik Buterin, will be unveiled this year. With the underground development coming into fruition, the future of Ethereum and DeFi has never been more promising.