With features such as token swaps, programmable liquidity, flash swaps and highly decentralized, manipulation-resistant price oracles, it is rewarding for developers to integrate their projects with thousands of tokens and billions in liquidity through Uniswap. It has so far facilitated around 41 million trades. The protocol has over 72,000 liquidity providers and more than 200 DeFi integrations. Uniswap: It’s a decentralized crypto trading protocol with more than $205 billion in trading volume. By the end of 2020, the TVL had crossed the mark of $13 billion, registering nearly 2,000% growth over a year. Even in February 2020, the total value locked in DeFi was hovering around $1 billion. The promise that Cuban sees in DeFi reflects its growth. Cuban himself has invested in multiple DeFi protocols, including AAVE and Sushiswap. Investors are seeing great potential in DeFi, with the billionaire entrepreneur Mark Cuban comparing its growth to that of the early days of the internet.
Yield farming, stablecoins, lending platforms and several similar derivative applications of DeFi have helped blockchain to become more rewarding and inclusive-and less volatile. Why Is There Hype Around DeFi?ĭeFi applications have expanded the scope of blockchain. The other protocols whose tokens occupy the rest of the five places in the top 10 list include Avalanche (AVAX), Dai (DAI), PancakeSwap (CAKE) and Maker (MKR). With more than $18 billion market capitalization, Uniswap’s UNI tokens top the chart, followed by LINK ($16.9 billion), WBTC ($9 billion), LUNA ($6.2 billion) and Aave ($5.4 billion). The total market capitalization of DeFi tokens stands at more than $110 billion. Newly evolving DeFi concepts such as yield farming, liquidity mining, composability, money legos and more enrich these applications. The most popular ones include decentralized exchanges, stablecoins, lending platforms, wrapped bitcoins and prediction markets. There are several types of DeFi applications. Languages, such as Solidity, are specifically designed to create and deploy these smart contracts. What gives this distinct advantage to Ethereum is the self-executing smart contracts. Ethereum is more conducive than any other blockchain to building peer-to-peer decentralized applications.
Most of the DeFi applications use the Ethereum blockchain as their foundation. Except for the parties involved, no one has the power to stop, pause or record the transaction in the private ledger. In decentralized finance, no such centralized authority or financial intermediary sits between the payer and the payee. When you use legacy digital payment methods such as credit cards, there remains a bank that has issued you the card to authorize your transaction between you and the seller. In the coming paragraphs, we will study them in detail. It includes diverse financial applications aimed at removing banking intermediaries or centralized exchanges from the financial system.Ī host of DeFi applications, platforms and tokens are revolutionizing the world of crypto-economy and finance in general. In that growth, the industry segment of DeFi, or decentralized finance, was one of the most prominent contributors.ĭecentralized finance is a system that leverages blockchain technology to make the world of finance more accessible. The year 2020 saw a phenomenal rise for the entire crypto industry.