DeFi Quietly Breaks Record as Investors Lock Up $15 Billion

Bitcoin’s price seems unstoppable. But DeFi is still also—quietly—growing.

Bitcoin’s price is on an unstoppable race to keep breaking new records—but it isn’t the only crypto project doing well. Today, the total value locked in the decentralized finance (DeFi) industry hit $15 billion, according to DeFi Pulse stats. 

DeFi—which exploded last year—refers to non-custodial financial products (mostly built on Ethereum) that want to revamp services like lending and borrowing. The total value locked in means how much money is staked in their smart contracts. 

The industry grew at a formidable pace in 2020—with billions of dollars being poured into its projects. The biggest projects in the space right now are three lending protocols: Maker, Aave and Compound. They have $3 billion, $2.08 billion and $2.07 billion locked in respectively. 

Maker has nearly 20% market dominance (the percentage a project’s market cap accounts for the entire DeFi market.) The price of the project’s token, MKR, was today $612.46, according to CoinMarketCap. AAVE and COMP stood at $86.50 and $141.98, respectively. 

Some called the industry a bubble because it was growing so quickly. But despite slowing down, interest in DeFi projects continues to surge. 

This time last year, the amount of money locked in to the DeFi industry stood at $689 million. That’s an increase of 2,077%. At one point, a billion dollars a week was being added to the total value locked into the industry last year. 

Interest in the projects has surged because investors are simply making so much money. Huge returns could once be made from yield farming, a process that allows investors to lock up their crypto and earn a fixed or variable interest.