Cryptocurrencies had a great year in 2021. In this period, we have seen the market go from being classified as a billion-dollar economy into a trillion-dollar economy. Aside from that, cryptocurrencies are gaining visibility in the mainstream world with, for example, El Salvador's adoption of Bitcoin as the official digital currency. As a result, investors are looking for the "new Bitcoin" on the market, hoping to find a great alternative in so-called altcoins. Unfortunately, many traders value an altcoin exclusively…
The current bullish sentiments in the crypto market have been the major talking point in recent weeks. Bitcoin pump has caused a ripple effect in the crypto market, which has extended to decentralized finance (DeFi).
Total Locked In Value hits $14billion
The Total Locked in Value in the DeFi sector surpassed $14 billion over the weekend. According to DeFi Pulse, the total TVL hit a record high of $14.3 billion in today’s early hours. At the moment, the value has retracted and is currently at $14.06 billion.
Looking at the numbers, MakerDao dominates the market with a total of $2.5 billion locked in its protocol. This is followed by Wrapped BTC, which has proven to be popular on the Ethereum network. The Wrapped token has $2.25 billion, and Compound (COMP) closes the top three with $1.55 billion in locked-in value.
Uniswap has seen its dominance evaporate in recent weeks and is ranked fifth on the list of DeFi protocols. However, it still tops as the leading decentralized exchange with $1.33 billion worth of volume. Meanwhile, SushiSwap, the clone version of Uniswap, has witnessed a resurgence with the Dex surpassing the $1 billion mark in TVL.
It should also be noted that the amount of ETH locked has been reducing in recent days. This could be due to stakers moving their assets over to the Ethereum 2.0 smart contract. Besides, the amount of Bitcoin locked in has also dipped during this period.
Several analysts have attributed the gains gotten by smaller tokens due to the current bull run in the market. However, this should be taken lightly as the DeFi sector has surprised all expectations in 2020.
Will the DeFi Bubble Continue
The lure of high yield, risk-free strategies has been the major factor behind the rise of several DeFi protocols since most of these platforms offer nice rewards for staking on their platforms for a defined period of time.
The dangers of DeFi are clear with several protocols the victims of hack attacks in recent weeks. However, this has not dampened the enthusiasm towards these projects. The future could likely see a major switch from this sector to other areas, but at the moment, the bubble continues.