Decentralised Finance, DeFi, is the latest buzzword in the crypto space.
As a society, we’re used to the idea of a centralised authority controlling the global (regional) money supply. However, these hierarchical systems are fretted with transparency issues and are susceptible to manipulation.
DeFi redefines the fundamentals of the conventional financial industry. It essentially eliminates the middlemen from financial transactions by deploying smart contracts running on blockchain networks.
Despite its inherent appeal to crypto supporters, there is a massive segment of ‘so-called’ experts calling it nothing more than a facade resembling the 2017 ICO boom.
We’re here to prove that this is merely the beginning of the DeFi era with these mind-blowing stats.
- Total Value Locked in DeFi Reaches $44.5 Billion. (300% Growth in 2021)
The Total Value Locked (TVL) metric is one of the primary gauges for measuring the growth of DeFi. At the time of writing this post, the total value locked in DeFi crossed $44.5 billion, registering a growth of nearly 300% in 2021 alone.
- 10+ DeFi Projects Hit $1 Billion Market cap.
DeFi projects are new to the crypto landscape, but they’ve already gained some serious traction. We discovered several DeFi projects surpassing the coveted $1 billion mark among fintech startups.
Some of the leading DeFi projects are (by market cap):
- Uniswap: $16.7 billion
- Synthetix Network Token: $2.89 billion
- Maker: $1.98 billion
- Compound: $1.93 billion
- Yearn.Finance: $1.32 billion
- Bancor Network: $1.28 billion
- 0x: $1 billion
- Stablecoins (Dai, USDT, USDC)
- Lending Sector Accounts for More than 50% of the TVL in DeFi.
Research reveals that the lending protocols (projects) account for over 50% of the total value locked across various DeFi projects. It is a critical metric because one of the core propositions of the DeFi industry is to create a global financial ecosystem that can bridge the gaps left by traditional financial institutions.
DeFi protocols achieve it by facilitating financial services on internet-enabled devices, thereby reaching the previously inaccessible corners of the world.
- Uniswap Enters Top 10 Cryptocurrencies’ Club.
And to add to the glory of DeFi projects is the entry of Uniswap, a decentralised exchange (liquidity provider), in the top 10 cryptocurrencies’ list. Uniswap token (UNI) is the eighth biggest cryptocurrency by market cap, standing at $16.7 billion.
Stablecoins Gain Popularity Amid Global Crisis.
Cryptocurrencies are highly volatile, limiting their adoption for commercial transactions. The DeFi industry addresses these concerns through stablecoins. Stablecoins are crypto-assets pegged against a fiat currency, such as USD. These crypto-assets provide the stability of a traditional currency while allowing enterprises to execute transactions across various blockchain networks. Tether (USDT) is the largest stablecoin by market cap, followed by USD Coin.
Challenge: A Fragmented DeFi Landscape
While the DeFi industry holds massive potential, it’s still in its nascent stages. One of the critical challenges of DeFi space is its fragmented nature. If a user wants to shift from centralised banking services to DeFi applications, he has to register across multiple platforms, maintaining several dApps, which could be overwhelming for most users.
Spherium is a decentralised financial platform that consolidates various DeFi applications under a single roof. Its services include a universal wallet, token-swap platform, decentralised lending markets, and cross-chain functionalities.
As the DeFi space matures, we are likely to witness innovative, stable platforms transforming how users interact with financial services.