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Decentralized finance (DeFi) sector has seen explosive growth this year. Many DeFi tokens have already soared to their all-time highs and are looking strong to hit higher highs. According to data aggregator Defi Pulse, the Total Value Locked (TVL) in DeFi has topped $82 billion and AAVE comes across as the leading project with 15.78% dominance and $14.98 billion in TVL.
Some of the factors that created a bullish case for DeFi tokens and projects includes rising total value locked, increased trading volume on decentralized exchanges, and growing users in the DeFi ecosystem.
Total Value Locked Touches All-time High
The data from DeFi Pulse highlights that the total value locked across all DeFi protocol is just a few billions away from hitting its All-Time High of $87 billion. The top 5 projects with the utmost contributions to the broader DeFi ecosystem include are Aave (AAVE) with $14.98 billion, InstaDApp (INST) with $11.47 billion, Curve Finance (CRV) with $11.07 billion, Compound (COMP) with $10.07 billion and Maker (MKR) with $8.72 billion.
All these projects when combined, give a total of $56 billion dollars which is about 65% of the total value locked. Analysts speculate TVL to be one of the best metrics to analyse DeFi ecosystem sentiment and growth.
Increased Trading Volume On Decentralized Exchanges
Another sign which denotes that the DeFi sector is booming is the soaring day-to-day trading volume on decentralized exchanges (DEX), led by Uniswap, whose volume has steadily increased, per Dune Analytics.
Besides this, Lucas Outumuro, head researcher at Into The Block revealed that decentralized exchange Uniswap became the very first DeFi protocol to cultivate more than $1 billion worth of platform fees for liquidity providers in August 2021.
@Uniswap just became the first protocol to surpass $1B+ in fees 🤯
Congrats to @haydenzadams and team 🦄 pic.twitter.com/pnA10t41Yo
— Lucas Outumuro (@LucasOutumuro) August 10, 2021
Growing New Users In DeFi Ecosystem
The third indication that DeFi tokens and projects will skyrocket is the continuously growing number of users entering the DeFi space. Data from Dune Analytics reveals that the number of new users as calculated by unique addresses interacting with DeFi protocols has significantly surged and now stands at a record high of 3 million.
The growth of DeFi space has seen a meteoric surge this year. The TVL, which stood at $13.69 billion in November 2020, swung up to $20 billion in December 2020 and stands at $82 billion today. Matthew Roszak, a veteran cryptocurrency investor and co-founder of DeFi platform Vesper believes the DeFi industry is poised to explode 10-fold. In an interview with Market Insider he noted that DeFi space TVL will hit $800 billion in the year 2022.
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