Messari research: The summary of DeFi situation in 2019 and trends for 2020

By Selena 12/29/19 7:39 PM

Decentralized finance or DeFi has evolved into one of the most active parts of the Blockchain industry and Ethereum projects have been at the forefront of establishing an ecosystem with network effects and full interoperability. However, the claims of DeFi being open, unauthorized and anti-censorship have been put into testing recently. And it is a bit early to believe in deep, aspiring claims.

While offering banking-like features with lending and borrowing, payments, derivatives and other features, DeFi applications built on the Ethereum Blockchain have benefited from this relationship when 2.932 million ETH locked in DeFi.

Also, 2019 has created many legal barriers for cryptocurrency businesses, mainly cryptocurrency exchange. Binance had to temporarily close stores in the United States to comply with statutory regulations and soon launch the Binane US. However, Binance has become a trend maker, as many exchanges followed its lead and started their exchange tokens, the IEO platform, and Blockchain.

Below is a brief summary of the general situation of DeFi in recent times

Lending is emerging as a growth market

In addition to solving liquidity problems, 2019 marks a growing market for loans, especially at DeFi. According to data provided by Messari, De DeFi’s protocols are derived from a $650 million loan, with $450 million currently locked as collateral and around $75 million in outstanding debt.

Source: Messari

Although mortgage lending has worked as a start, it is not a feature where a new financial system can be built. The report says the DeFi loan equation has a gap that needs to be filled with better-decentralized credit grading and credit scoring applications. Hopefully, next year, the Messari CEO’s report, Ryan Selkis, remains positive about the Islamic Continuity Organization and thinks it may be similar to the Unisawp of ICO in 2019. Unisawp is an auto market maker, which allows anyone to get paid in exchange for depositing capital into a common liquidity group.

Source: Messari

MakerDAO led to growth in value locked in DeFi

Although the decentralized financial process in 2019 may originate from MakerDAO, it is no longer the only important DeFi protocol. MakerDAO is a stablecoin manufacturer, supports the majority of the DeFi ecosystem and remains the largest and most tested mortgage stablecoin solution.

MakerDao is likely to face strong competition on the lending and stablecoin fronts. Synthetix and Compound have evolved as a competition with the industry’s important protocol, MakerDao.

The rise of DeFi protocols began around July 2019 and during the first seven months of the year, MakerDao contributed to leading the growth in locked-in value in DeFi.

The report stated:

“The world’s leading manufacturer has generated most of the value growth in DeFi in the first half of this year, doubling from around $250 million in January to $500 million in July.”

At press time, Maker locked $321.7 million ETH in DeFi, while Synthetix and Compound recorded a combined value of $258 million. Maker’s dominance has decreased from 90% at the beginning of the year to less than 50%.

Source: Messari

With the launch of Dai-Collonymous Dai (MCD), Maker will support new types of collaterals besides ETH and Dai Savings rate (DSR), a risk-free risk ratio to help ensure Maker stability fees are kept in check. With these two additional features, Maker has an option to increase Dai demand and help attract new collateral facilities by 2020 to spark growth.