- The decentralized finance (DeFi) ecosystem has been booming in 2020 as value locked surges.
- Compound has taken the ecosystem by storm, boasting a 34% dominance.
Decentralized finance is the application and integration of blockchain and cryptocurrency within the financial sector. In other words, decentralized finance applications (dApps) aim to use the capability and advantages of blockchain technology and merge them with traditional financial services. One of the many benefits of DeFi is the ability to eliminate the middleman and facilitate trust-less transactions.
The ecosystem saw what was then massive growth in 2019, with the value locked increasing by over $450 million from just $240 million. However, the growth in 2020 so far has already dwarfed 2019 in comparison, with the value locked in the ecosystem increasing by $1 billion.
What’s more, is that the value locked in the DeFi ecosystem is growing at a rapid pace. The Crypto Associate, reported on total value locked reaching an all-time high of $1.6 billion just two weeks ago. More importantly, if the ecosystem grows at the current rate, the total value locked is on track to reach $2 billion this month.
With the decentralized finance ecosystem already breaking records this year many are looking optimistically towards to future of decentralized finance.
Compound Takes The DeFi Ecosystem By Storm
Compound is primarily responsible for the recent surge in value locked in the decentralized ecosystem. Compound is a lending decentralized finance application now boasting over $600 million locked away in the application. As a result, Compound is now the largest decentralized finance application by value locked, boasting a 34% dominance.
Furthermore, Compound’s COMP token grabbed the attention of the crypto community as the token rallied to over $400 creating a crypto frenzy. While the token has since corrected and is now trading at $180, the token’s rally may be representative of the growing interest in DeFi.
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