Despite the volatility in the Ethereum market, decentralized finance (DeFi) continues to grow rapidly in recent months. The head of cryptocurrency fund DTC Capital and analyst Spencer Noon stated that DeFi has exploded magnificently according to four key metrics. Noon explained these four metrics:
- In DeFi contracts, $ 4.27 billion worth of cryptocurrencies (ETH, DAI, USDT of Tether and other altcoins) are locked.
- Currently there are 300,000 users of DeFi protocol, this number is rapidly approaching one million.
- In the past 12 months, $ 10 billion has been traded on decentralized exchanges (mostly Ethereum based).
- The $ 1.42 billion debt issued by DeFi protocols still exists.
DeFi, an industry that is barely a few years old, is breaking out in spectacular fashion:
1⃣ $4.27B total value locked
2⃣ 300K users w/ 1M in sight
3⃣ $10B trailing 12-mth DEX vol
4⃣ $1.42B debt outstanding
Once again in the crypto world it's all eyes on Ethereum, not Bitcoin. pic.twitter.com/iG7lO2v2hE
— Spencer Noon (@spencernoon) August 4, 2020
Can benefit from ETH DeFi
The growth of Ethereum’s decentralized financial sector is likely to cause growth in ETH value. Ryan Sean Adams, founder of Mythos Capital, expects DeFi to create record demand for Ethereum transactions and ETH. This means that the asset can be appreciated over time, assuming the supply is reduced due to stakeholder evidence and the implementation of EIP-1559.
Spencer Noon recently said on Twitter that his corporate interest in DeFi came first with Ethereum, not with DeFi cryptocurrencies or protocols:
“They are excited about DeFi but this is new to them, so they are buying ETH first. After the positions are adjusted, I expect them to move the risk spectrum to the protocols. ”
The increase in demand for ETH with DeFi is a trend that some have already noticed. A crypto commentator has recently noted that the number of ETHs that crashed in DeFi protocols (smart contracts) is a metric of about 30% in the past 30 days.
However, it is not yet clear how much ETH will be collected from DeFi-related network effects.