The past 12 months have seen the total value locked in DeFi protocols surge by 936%.
DappRadar, an analytics platform, conducted in-depth research on the DeFi ecosystem and revealed that both Non-fungible tokens (NFTs) and decentralized finance (DeFi) markets have seen an unprecedented growth this year. In their “Value Flow Report” on Thursday, DappRadar shed light on how recent trends have seen substantial growth in blockchain gaming and NFTs. In addition, the report adds that DeFi is still on an upward growth curve, generating substantial value.
Potential for Further Growth
The report by DappRadar went into analysing Ethereum-based DeFi since it is the dominating force in the DeFi ecosystem despite the rise of competitor networks such as Avalanche, Solana, and Binance Smart Chain (BSC). Value has not stopped flowing as wrapped Ether (wETH) sees a 400% gain since July 2020. Stablecoins Dai and Tether (USDT) increased by 500% and 1,300% respectively, over the same period.
From DappRadar’s report, the total value locked (TVL) stands at $114.8 billion, which is a 936% gain since June last year. Further, the industry’s TVL grew by 75% between July 23 and Sept 5. The TVL peaked at $195 billion across all chains, which is a remarkable feat.
The analytics platform suggested that using TVL to measure the movement of value is not recommended.
Whilst TVL is one of the most important metrics to assess the current state of Decentralized Finance, it is not a metric to understand value flow movement. The TVL is completely dependent on the underlying asset, thus, providing a false optic from the value perspective.
NFTs also beating the Odds
DappRadar’s report also noted that in August NFTs saw record volumes with a total of $5.2 billion worth traded. On the NFT sphere, Ethereum is still the dominating network with 90% of all NFTs volume on its blockchain.
NFTs market leader is the marketplace, OpenSea with 99.7% of its trades occurring on Ethereum despite the availability of Polygon (MATIC), Dai and USD Coin (USDC) options for sellers. DappRadar touched on how NFT growth has been organic and has not leaked much liquidity from DeFi protocols.
All in all, it appears that the value in DeFi is growing constantly, whilst NFTs were able to generate a major value flow in August.
The crypto ecosystem is seeing more and more investors diversifying their portfolios and moving their assets into DeFi protocols, and with the continued Beijing crackdown, regulatory fears are growing.
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