As the price of Bitcoin (BTC) continues to float between the $30,000 – $40,000 mark for a second month, there has been no shortage of sceptical pundits willing to celebrate the much-vaunted demise of the decentralized economy.
Even though Bitcoin has near enough halved since hit hitting its $64k all-time high, it is easy to forget that Bitcoin posted a 305% increase for 2020 and that the price of Bitcoin has posted a 533% increase since the third halving in May last year.
Meanwhile, whilst cryptocurrencies in general and not just Bitcoin, have swirled around in a volatile storm, the DeFi sector’s strong rays of hope are breaking up those storm clouds.
Just a year ago, there was around $1.25 billion of ‘total value locked’ (TVL) in DeFi protocols. Today the defi locked tvl has exploded to be worth more than $62.5 billion.
DeFi’s resilience has been on full show over the last few weeks. Whilst Bitcoin and leading digital coins have mostly traded sideways, the total value locked has steadily increased. In fact, the DeFi sector has seen a 20% rebound over the past two weeks alone.
As the bearish pressure appears to have eased and the selloff in the crypto market abated, DeFi is seeing more and more collateral being pumped into it. CoinGecko’s TVL figures show an increase of 24% since June 27 whilst DeFiLlama posted a 20% gain in TVL across listed platforms. The TVL on Binance Smart Chain-based protocols rose 14% in the same period.
DeFi Users Hit Three Million on Robust Demand
The growth in popularity of DeFi coins and the DeFi sector is for all to see. Recently, the number DeFi users hit a milestone of three million. However, there is a little scepticism over this figure as it does not recognise that the are multiple addresses per user. Even so, with a conservative estimate of around the 1 million mark, this is still considerable growth in a short space of time.
Taking into consideration that the wider cryptocurrency market has accelerated its downturn since the 12th of May, TVL has slipped back from the recent all-time high. However, TVL still remains significantly higher than they were half a year or a year ago. Meanwhile, new DeFi coins, platforms and services are being rolled out frequently, as companies seek to capitalize on the robust demand for decentralized financial services.
The reason for the robust demand and DeFi’s growth in 2021 is due to the fact that DeFi provides a tangible and very real use case for crypto. The emergence of an increasing number of gamified DeFi opportunities over the last few months shows that there are still avenues left to explore in DeFi.
DeFi has managed to grow and will keep on growing during a crypto storm because DeFi has succeeded in attracting more than just crypto fans. DeFi builds the bridge and the gateway that enables the everyday person to enter the world of crypto.
Whether DeFi can sustain this growth period is another matter. However, for now, DeFi has been able to weather the storm by being the storm.
some great points of Defi here