DeFi industry now boasts of $200B in total value locked (TVL), Ethereum’s dominance declines


The decentralized finance (DeFi) industry has now topped  $200 billion in total value locked (TVL). Tracking site DeFiLlama says that this amount is double that held in late June. Chinese journalist, Wu Blockchain tweeted;

According to DefiLlama, the total TVL of DeFi has exceeded $200 billion, which has doubled since the end of June. Ethereum TVL has dropped from 98% in January to 68.5%. The next rankings are BSC, Solana, Terra, Avalanche, and Fantom,

Notably, TVL refers to the dollar value of tokens held across multiple DeFi protocols, be it lending, trading platforms, or others. It is worth noting that TVL figures are more of estimates since trackers can count the same coins more than once.

DeFi TVL touches the $200B mark

Projects on the Ethereum blockchain hold the majority of the DeFi sector’s TVL at $140 billion. Notably, the figure is 55 percent higher than that quoted by DeFi Pulse. Binance Smart Chain (BSC) is the first runners up with $18.5 billion followed by Solana with $11.7 billion. The other big blockchains are Terra, Avalanche, and Fantom.

Additionally, DeFiLlama includes a few scaling networks built on Ethereum, such as Polygon, Arbitrum, and Optimism. The latter two networks were launched recently and hold relatively smaller amounts of value locked.

Despite dominating in DeFi protocols’ TVL, Ethereum has lost a huge chunk of the command it held earlier on. With the rise of DeFi protocols on other chains, Ethereum’s dominance is now at 68.5 percent, down from 98 percent in January. It is likely developers and users are migrating to other blockchains that are less congested and with friendlier fees. During that time frame, however, the network’s TVL has multiplied fourfold.

Over the years, coverage of the relatively nascent DeFi field has been increasing as people seek new ways to earn income. Most of these protocols offer interest rates that are unbeatable by those of centralized finance (CeFi) offerings. Between May and September 2020, capital invested in the ecosystem rose tenfold, from $950M to $9.5B, DeFi Pulse shows.

On the flipside

But even then, the ecosystem has not been completely immune to setbacks and criticism. PolyNetwork, for instance, experienced one of the largest DeFi hacks yet, losing over $600 million. Several other similar platforms have also been hacked for crypto worth millions. These are pNetwork and Neko Network which lost $12.7 million and $2 million, respectively. Additionally, Arbitrum, a DeFi app on Ethereum, and the Solana network suffered significant downtime last month.

Nonetheless, the ecosystems’ advantages have ruled supreme over their deterrents. Even billionaires such as Dawn Fitzpatrick, CEO of Soros Fund Management, have ventured into the same. Leading crypto exchange Coinbase planned to dive into a lending product before receiving a deadening effect from US regulators.

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