DeFi Craze Doesn’t Seem To Be Slowing Down Nearing $13B In Value Locked
Quick Read
- Total value locked (TVL) within DeFi applications nears $13B, an all-time high.
- Decentralized finance has seen a surge in popularity this year.
Decentralized finance (DeFi) is the application and integration of blockchain and cryptocurrency within the financial sector. This crypto sector has seen a surge in popularity as a myriad of new projects evident by the parabolic rise in total value locked (TVL). According to DeFi Pulse, this figure has risen from under $1B to nearly $13B in less than a year.
The past summer, at the height of the DeFi boom, The Crypto Associate took a closer to look at the scale of decentralized finance. In addition to a rise in TVL, many defi-based crypto tokens saw an exponential price increase, with some tokens offerings gains multiple times over.
While the decentralized finance craze presents another use for cryptocurrency and subsequently blockchain technology, the recent boom has also come with its downsides. With many popular DeFi applications built on the Ethereum blockchain, transaction fees have risen incrementally to the point where micropayments are no longer feasible.
According to data by BitInfoCharts, average Ethereum transaction fees surpassed $14 on September 2nd, meaning a single transaction would cost $14 to send — regardless of the amount. While transaction fees have since fallen, a resurgence in the DeFi craze may once again spike fees and, just like the Bitcoin blockchain, eliminate efficient micropayments
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