The decentralized financial sector continues to evolve rapidly as multiple tokens reach new all-time highs and the total value locked into DeFi
protocols continues to grow.
Tokens such as Uniswap
(MKR) and Curve (CRV) have doubled in price once or more in the past 30 days, which has also resulted in a significant increase in the number of users of these projects. This has a positive effect on the price, as the demand for these DeFi tokens increases with the growth of the number of users.
The growth of the decentralized financial sector can also partly be accredited to the rise of the crypto market as a whole. The sentiment around crypto has turned completely, leading many to delve into decentralized exchanges and lending platforms, outside of the mainstream Bitcoin
(BTC) and Ethereum
The market capitalization of all DeFi tokens combined has now reached a record high of $45 billion, which is not yet much compared to the market cap of Bitcoin ($600 billion), as this sector is developing very explosively.
This can also be seen when we take a look at the TVL (total value locked) in DeFi. The total value locked in all DeFi protocols has seen a growth of 67% since the new year. On January 1, this was $15.6 billion and today it reached a record high of $26.1 billion.
In fact, in the past four days alone, this amount has grown from $21 billion to $26.1 billion. Looking very similar to the parabolic growth we have experienced so often with our precious Bitcoin.
The sharp rise in locked value can be partly explained by the sharp rise in the price of Ethereum. Since many liquidity pools contain ETH, it is logical that with an increase in the price of ETH, the locked value also increases, but not everything can be accredited to the price increase of ETH. More and more use is indeed being made of DeFi platforms, as can also be seen from the prices of the corresponding tokens.
Despite this impressive development, the market cap of the DeFi sector only takes up 4.6% of the total cryptocurrency market cap which currently stands at $950 billion.
This is still little, but the rapid growth of DeFi suggests that this sector is in the starting blocks for explosive growth, as there are many flaws in the centralized financial sector and cryptocurrencies are increasingly becoming more accepted.