DeFi (decentralized finance) is gaining momentum. This dynamically developing segment of the cryptocurrency sphere has now closed for itself cryptocurrencies worth $8.24 billion. At the same time, each of the four key projects (Aave, Maker, Curve Finance, and Balancer) has become a “cryptocurrency unicorn,” as it attracted more than one billion dollars in cryptocurrencies from investors.
DeFi makes financial services more comfortable to use, which eventually attracts classic investors to decentralized finance as well. Weekly information appears that a particular DeFi project receives financial support from a venture capital fund, that is, from the world of traditional finance.
At the same time, Bitcoin is increasingly coming into the world of DeFi, where most projects are built on the Ethereum blockchain. Thus, according to analyst Zack Voell, currently 51,156 Bitcoins were tokenized on the basis of Ethereum.
For comparison, this amount of funds in Bitcoin is almost 50% of the amount of reserves in Bitcoin, which are available on the Bittrex Crypto Exchange. Similar figures for Gemini and Bitstamp are 53% and 44%.
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DeFi could benefit from the current crisis
Analysts pointed out that the heyday of DeFi came at a time when the world economy was experiencing financial turbulence as a result of the COVID-19 pandemic. This is a reminder that Bitcoin itself appeared during the previous crisis, which occurred in 2008. Nowadays, mankind’s need for digital financial communications has increased dramatically, and DeFi seems to be an increasingly adequate response to this demand.
At the same time, the number of bankruptcies of traditional financial structures in the world’s largest economy, the United States, reached its highest level in August for the last ten years. In addition, there are 1.7 billion people in the world who do not have access to a full range of financial services, which is often due to the lack of traditional financial institutions in a particular region of the world. In this situation, DeFi has great prospects, and there is a high probability that it will not become as transient as it once was with the boom of ICO.
The number of DeFi projects increases
The appearance of DeFi project tokens on crypto-exchanges becomes a new impetus for increasing investor interest in such cryptocurrencies. In addition, it slowed down the outflow of funds from them, as a result of which the attendance of such sites increased by an average of 13% in July. Decentralized crypto-exchange Uniswap, which also “grew” from DeFi, is in the lead in terms of growth rates.
To date, DeFi projects have accumulated $6.17 billion worth of cryptocurrencies. Along with the growth of the “pulse” of decentralized finance, more and more projects are emerging, and the share of the leader, MakerDAO, continues to decline, reaching 23.91%.
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