TVL in DeFi surpasses $11 billion with UniSwap crossing $2 billion

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Last Updated on 28 September 2020 by CryptoTips.eu

The Decentralized Finance (DeFi) ecosystem continues to grow with the Total Value Locked (TVL) in DeFi protocols now exceeding the $11 billion mark. Earlier we recorded a 22% drop in the Total Value Locked (USD) in DeFi.

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Decentralized Finance (DeFi) breaks new records

DeFi’s market capitalization valuation is calculated by the total value of assets deposited by users within the protocols and this is represented by the total locked-in value. This metric is the most used and the most accurate to assess the popularity of a DeFi protocol.

According to the DeFi Pulse data, 1 year ago to the day, DeFi’s TVL was only $500 million. In just 12 months, the TVL of the DeFi ecosystem has multiplied by 20x to exceed the $11 billion mark today.

DeFi Pulse Total Value Locked 11.16B
Total Value Locked 11.16B. Source Defi-Pulse.com

Who leads DeFi?

The top 3 protocols for TVL to date are Uniswap ($2.03 billion), Maker ($1.96 billion), and Aave ($1.5 billion). They alone account for more than half of the current TVL, with an 18.54% dominance of Uniswap.

The first DeFi protocol to cross the $2 billion threshold is UniSwap. Uniswap ‘s TVL has notably experienced a meteoric rise following the introduction of UNI, its governance token.

SushiSwap, the former main competitor of Uniswap, for its part has suffered an endless fall. After accumulating up to $1.5 billion in TVL, this Uniswap clone is losing many followers every day since the arrival of UNI. Currently, the TVL is only $375 million, almost knocking them out of the top 10.

The 5th position is an outsider, WBTC with nearly $955 million in TVL at the moment, which is impressive.

At the start of September, only 52,000 WBTCs were in circulation, or nearly $ 545 million. 87,500 WBTCs have been forged at the time of writing and in the long run it is highly likely that WBTC’s TVL will continue to grow, propelling the token into the top 3.

Ethereum, the eternal leader in DeFi?

Almost all of the Decentralized Finance protocols are hosted on Ethereum, with the blockchain having the heavy burden of supporting the entire ecosystem on its own.

The consequences for the network are numerous, with Ethereum becoming more congested, making transactions more expensive for users.

On the DeFi protocol side, it is difficult for newcomers to find a place and adding liquidity to Uniswap for their underlying token potential comes with exorbitant fees.

Today, there is a growing need for an alternative to Ethereum, and the wait around Ethereum 2.0 is colossal, as this update is supposed to solve all the current difficulties of the network.