The decentralized finance (DeFi) sector is booming. The total market capitalization of the sector has exceeded $2 billion within the first days of summer.
The total value of DeFi products surpassed the milestone of $2 billion this weekend. The number illustrates the rapid growth of the decentralized finance industry, which has been worth $1 billion just a few months ago, as shown in the data of data analytics website DeFi Market Cap.
Since it took about a year for the whole DeFi industry to gain its first billion, the latter growth suggests the DeFi market might become mainstream more soon than expected.
The cryptocurrency market experts claim, that the value of DeFi industry is expanding as users are looking for alternative ways to get a loan or earn interest and traditional financial institutions are not able to control them:
DeFiMarketCap data shows that the total value of #DeFi products has exceeded💲2 billion.— Huobi Research (@Huobi_Research) June 9, 2020
It means that the value of the industry expanding rapidly because users are finding ways that banks and traditional financial institutions cannot control to obtain loans and earn interest. pic.twitter.com/LIB3Pv67Ms
Decentralized finance (DeFi) refers to financial software like digital assets, decentralized apps (dApps) and financial smart contracts, that are developed on top of the blockchain network. The aim of the sector is to recreate traditional financial services and enable anyone with full control of their assets.
The main value generators
There are various financial products involved in DeFi, that generate the current total value of $2 billions. According to DeFi MarketCap, there currently are over 500 projects listed. However, the leading ones represent the most popular sectors of lending services as well as decentralized exchanges (DEX).
The leading value generator currently is MakerDAO. The decentralized credit platform built on Ethereum has the market capitalization that exceeds $563 million at the time of writing.
The following ERC20 DeFi project, the decentralized exchange (DEX) protocol 0x is ranked in a second position, with over $333 million market cap. In the meantime the on-chain liquidity protocol Kyber Network Crystal, the project also built on ERC20, currently has over $184 million market cap and is ranked third.
Other popular DeFi protocols include Synthetix Network Token (SNX), the blockchain synthetic assets that tracks the value of real-world assets, and UMA voting token, which allows voting for DeFil contracts platform built to enable Universal Market Access—UMA.
Best performing categories
The three of Top-5 DeFi projects by market capitalization are built on Ethereum blockchain. As it was reported previously, the DeFi project based on Ethereum increased 800% during the last year. The numbers could be bigger by today, as the mentioned statistics do not include the data of the second quarter of 2020.
The Finance, DEXes and Risks categories of decentralized applications based on Ethereum network are leading and most growing ones. Compared with the previous year, the transaction volume of financial dApps increased over 1700% and reached nearly $3 billion, in the meantime the category of DEXes counted 430% growth with the $2.34 billion total volume.