DeFi Pulse data shows that the value of coins locked in DeFi has surged over $8 billion

The DeFi market has grown exponentially over the past few months. Among them, DeFi tokens – most of which operate on the Ethereum network – currently have a market cap of over $ 13 billion. It is worth mentioning that just six months ago, this figure was a mere $ 5 billion, maybe even less.

According to data from DeFi Pulse, the value of the coins locked in DeFi has increased by more than $ 8 billion. At the beginning of the year, this figure was close to $ 700 million. Early investors in this sector have been fortunate. There are specific cryptocurrencies in the Ethereum DeFi ecosystem that have surged by tens of thousands, even hundreds of thousands, in just the past few months.

Was DeFi the world’s best investment in this decade?

According to Qiao Wang, decentralized finance is the best investment opportunity since Bitcoin and Ethereum.

As the former Messari product manager and longtime trader, on the issue on September 8:

This view is not entirely wrong.

Technically, DeFi’s growth potential is the size of the entire financial sector, worth trillions worldwide. In a shorter time frame, DeFi could grow to become the largest sector in cryptocurrencies, outpacing the largest blockchains like Bitcoin and Ethereum.

Commenting on the potential for decentralized currencies and financial protocols to swallow “$ 50 billion” locked in the so-called “ghost” blockchain, Gnosis’s Eric Conner said:

“The ghost chain reckoning is coming. There is well over $50bn in market cap value for chains no one uses. They will all be usurped by DeFi apps with actual use by the end of this market cycle.”

Ethereum is still unstoppable …

Despite that potential, Ethereum and its DeFi market are currently unstoppable. First and foremost, the transaction fees are high. Over the past few days, costs routinely hovered over $ 10 – $ 20.

Jacob Franek, the co-founder of blockchain data company Coin Metrics, thinks these high fees will make it difficult for DeFi to go too far:

“Gas prices will put a hard cap on this DeFi bull run. To be expected and probably a good thing… High gas likely new normal.”

There is also the opinion that the way Ethereum’s Blockchain is currently being set up, with its 13-second block generation time and low data throughput, will not allow many complex financial transactions to take place.

There is also the specter of regulation that could, in the long run, pose a threat to stablecoins and other financial mechanisms. For example, FATF recently mentioned “DAI,” although it is decentralized, as a stable currency should be managed in a similar way to other online payment mechanisms.

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