In a very short spam DeFi sector has transformed into a multi-billion dollar economy. It is providing multifarious financial services of decentralized nature within the global crypto industry and outside its generic threshold.
The Crypto economy, as of today, is exceeding US$ 3 Trillion of which Bitcoin is the majority contributor. Although, Bitcoin could easily be regarded as the “innovation of the century”, yet innovations are taking place within the digital industry as well. Decentralized Finance (DeFi) and Non-Fungible Tokens (NFTs) are two of the most prominent innovations within. As the name suggests, DeFi is a financial lending service that is based on a peer-to-peer network.
The sector of DeFi has become so huge that currently there are several DeFi projects. The most popular DeFi project currently in the world is “Maker (MKR)”. The project is granting financial loans to crypto investors through its very own stablecoin known as “DAI Token”.
In 2020, DeFi economy was recorded to be slightly above US$ 20 Billion. However, the sector is completely different today. The economy of DeFi has increased manifold and as of today, it is exceeding US$ 257 Billion. This meant that in less than a year, there has been an increase of more than US$ 237 Billion. Before 9th November 2021 however, the economy was at its highest peak i.e. US$ 275 Billion. However, the value shrinkage of cryptocurrencies affected DeFi economy and reduced it to US$ 257 Billion.
As a result of the economic shrinkage, several top DeFi tokens’ values were reduced as low as 15 and as high as 24%.
Out of this US$ 257 Billion of DeFi economy, most of the tokenized funds are controlled by Ethereum. Ethereum’s share in the DeFi economy is above US$ 164 Billion. BSC, which is the stablecoin belonging to Binance Smart Chain has been in command of US$ 16.61 Billion in DeFi. Other notable contributors to DeFi economy are the stablecoins of Terra, Tron, Avalanche, and Solana. Collectively, the four stablecoins have been contributing US$ 42.26.
It was easy-going for DeFi sector until NFTs came in followed by Metaverse. Currently, it is the Metaverse that is taking a lead over DeFi and NFTs. Yet still, DeFi has a brighter future than both i.e. NFTs and Metaverse.