State of DEFI: Latest Trends and Statistics
Trends change fast in Defi. In the past three years, DEXs, yield farming applications, lending applications, algorithmic stablecoins, and liquid staking protocols have come to the fore, respectively. Applications operating in these categories are now mature. The high returns in bull season are not there, but safety and sustainability are better.
Popular Defi networks, as well as categories, have changed over time. In the beginning, there was only Ethereum. Then Binance Smart Chain(BSC) came into the picture. Soon after, Polygon became popular. In the summer of 2021, the Solana wind blew. In the fall, Avax and Fantom became popular. Terra Luna in the first quarter of this year and Tron in the second quarter became the favorite of investors. Recently, Optimism has come to the fore because of the coin airdrop. Arbitrum, another Ethereum scaling solution, has therefore entered the radar of investors.
Like other areas of the crypto market, Defi has been adversely affected by falling coin prices. However, the difficulties faced by Defi applications are insignificant compared to the challenges faced by central exchanges.
Effect of Price Drops on DEFI
The collapse of Terra Luna was a historic event for the crypto world. This event raised questions about the concept of Defi in investors' minds. All eyes are on other stablecoins. Maker DAO's DAI stablecoin has retained its peg.
On the other hand, despite the dramatic decreases in the value of the cryptocurrencies they receive as collateral, there was no problem in DEFI lending applications. However, the centralized lender firm, Celsium, has blocked its customers' funds.
On the other hand, there has been a lot of news that central exchanges will lay off a significant part of their employees. Decentralized finance applications with fewer employees are okay with costs.
We can calculate the share of DEFI in cryptocurrencies when we compare the total statistics with the Coinmarketcap Total Cryptocurrency Market Cap. The percentage of the DEFI total value locked (TVL) value in the crypto market cap was 2% at the end of 2020. DEFI TVL accounted for 7.4% of the total value of crypto at the end of last year. Today, this figure has dropped to 5.3%. We can expect this rate to increase again in the coming period.
Liquid staking protocols have been popular investment apps in the Defi field recently. When the price of Lido Staked Ether (STETH), produced by the Lido application, fell to 95% of the Ethereum price, there was anxiety in the market. Now, the STETH price has caught up with the Ethereum price again. LIDO is the second-largest DEFI application, with a TVL of 7.6 billion TL. In the first place is Maker DAO, which is 8 billion dollars.
Coinbase, which later entered the liquid staking business, reached a size of $ 1.3 billion quickly. On the other hand, Lido and Coinbase's Ethereum
It is not desirable for them to have such a large share in their network.
InstaDApp (INST) is a decentralized application that combines different DEFI protocols. It allows the implementation of various DEFI strategies on applications such as Uniswap and Compound on the Ethereum network. Instadapp's TVL has risen 23% in the past month to over $2 billion.
Defi dapps operating on multiple blockchains was one of the critical trends of the past year. Apps such as Lido, Curve, Aaave, and Uniswap, which are in the top five for TVL, have benefited from this trend. Only the leading rank Maker DAO operates on a single network.
58% of DEFI TVL is still on the Ethereum network. In second place is BSC, with a 10% share. Tron comes in third place with a share of 9%. Regarding the number of users, Pancakeswap, which operates on the BSC network, is far ahead.
Although their names are often associated with hacking events, the importance of blockchain bridges will increase in the coming period. One of the areas with significant potential is trading derivatives of non-digital financial assets on DEFI applications.
Hive DEFI Dapps
With its decentralized structure, security, and near-zero transaction fees, Hive has significant potential in the field of DEFI. Although statistics are not published on platforms such as Defillama, an important DEFI activity is carried out on Hive.
We can buy and sell Hive ecosystem tokens and significant cryptocurrencies through the Beeswap app. It is also possible to invest in liquidity pools on Beeswap DEX.
After the interest rate rose to twenty percent, HBD deposits increased steadily. Regarding risk-return balance, HBD is the most attractive, stablecoin in the crypto market.
Thanks to the blockchain bridges created by the Leo Finance team, we can transfer Hive and HBD to Ethereum, BCS, and Polygon networks.
The Polycub application on the Polygon network enables innovative yield farming investments. The Cubdefi yield farming application on the BSC network offers attractive investment alternatives.
There were problems with the sustainability of the token price in early DEFI implementations. Since last year, application developers have started to come up with innovative solutions in this field.
Investment alternatives emerged, where investors gave up their liquidity for a while. Term deposits make liquidity predictable for applications and facilitate liquidity management.
Play-to-earn games also include plenty of DEFI practice. Along with the game mechanics, designing the token economy well is necessary. We cannot deny the success of Splinterlands in this regard.
SPK Network and Ragnarok game will also significantly contribute to Hive in the field of DEFI. Honeycomb infrastructure allows buying and selling Hive tokens directly on the Hive network.
It is possible to create sustainable economies when protocol-owned liquidity and incentives are brought together correctly. In this respect, following SPK Network and Ragnarok projects closely is worthwhile.
Defi is heading in a direction where DAOs and incentivization are more ingenious. So far, the basic building blocks have been formed in Defi. More magnificent structures will undoubtedly emerge in the future in Defi. It is not possible to predict when the next DEFI summer will start. It is helpful to follow this field closely, especially the Hive projects.
Thank you for reading.
Posted Using LeoFinance Beta