The decentralized finance (DeFi) sector continues to experience significant growth, as the total value locked in its markets has surpassed $4 billion, according to DeFi Pulse data.
DeFi markets leverage blockchain or distributed ledger technology (DLT), crypto-assets, and smart contracts (automated business logic), in order to develop seemingly innovative financial products and services, including credit and lending solutions – which usually don’t require intermediaries or centralized entities to settle transactions.
As reported in early February 2020, there was only around $1 billion locked into the DeFi space before the COVID-19 outbreak began to impact the global economy.
Now though, there’s over $4 billion locked across various DeFi smart contracts, open-source protocols, and decentralized applications (dApps). Most of these solutions have been developed on Ethereum (ETH), the world’s largest blockchain platform for deploying dApps.
MakerDAO, a “decentralized” lending system that’s supported by various stablecoins such as Dai, has the largest market cap out of all others. There’s more than $1.2 billion in value locked into MakerDAO, accounting for about 30% of the total value allocated to DeFi markets (at the time of writing).
The Ethereum (ETH) price, along with the BTC price, has been surging. ETH crossed the $300 mark after almost a year. This may be due to the anticipation and excitement that’s building up before the expected launch of Ethereum 2.0, a major system-wide upgrade that will involve a transition from proof of work to a proof of stake consensus model.
Other Ethereum competitors such as Cardano (ADA) have also announced major developments recently. After around five years of peer reviewed research and development, the Cardano mainnet, called Shelley, is now live.
It may, however,