As the cryptocurrency market has surpassed $ 2 trillion in market capitalization, DeFi products are experiencing record usage.
Additionally, although Bitcoin led the market rally, DeFi tokens such as AAVE and SUSHI were the first to break records.
Here are 5 indicators of unprecedented demand for decentralized finance
The cryptocurrency market surpassed $ 2 trillion in total market cap last week, after hitting record highs across the board. If BTC and ETH led the latest offensive, decentralized finance tokens (DeFi) did indeed trigger it. BeInCrypto takes a look at five metrics that suggest demand for DeFi is at an all time high.
1. Total Locked Value (TVL)
February 22, earlier this week the TVL for all projects of DeFi in the field of cryptomonnaie and blockchains reached a record high of 43.15 billion dollars .
Since the start of the year alone, TVL in the DeFi sector has grown by almost 200%, after starting 2021 at around $ 15 billion.
This rise illustrates the market demand for DeFi tokens, as well as the demand for products that can be staked (known as staking), such as Yearn Finance vaults.
Indeed, the three main DeFi projects in terms of TVL, MKR (Maker), Aave (AAVE) and Compound (COMP), are all loan products in which people participating in the staking can earn interest.
TVL is a measure of the value of all assets staked in a DeFi project
2. Ethereum gas charges
The gas cost per transaction of Ethereum (ETH) have also set records in response to the growth of trade using decentralized platforms (DEX) based on the ETH network.
On February 23, the average price of gas (GAS) reached 373.8 Gwei , the highest level since last September. The cost of transactions on the ETH network thus exceeded 40 dollars on average.
As a result, ETH network-based DEXs such as Uniswap ( UNI ) and SushiSwap (SUSHI) saw their swap prices reach $ 100 per trade. While these high fees are a source of frustration for DEX users, they also reflect the strong demand for the use of decentralized exchanges, with users charging increasingly higher fees to minors to ensure their transactions are processed.
3. Growing number of DEX
According to DeFi Pulse, there are now at least 18 DEX with significant trading volume. However, these numbers only take into account DEX based on ETH.
Recently, several other DEXs have emerged or become popular in response to ETH’s high gas charges. These include DEX such as Serum (SRM) and PancakeSwap ( CAKE ).
Both Serum and PancakeSwap are non-Ethereum-based DEXs, the former using Solana (SOL) and the latter Binance Smart Chain (BSC). These two DeFi platforms benefit from significantly lower fees than Ethereum.
4. DEX transactions are at an all time high
According to the latest data, the total number of transactions on all DEXs tracked by Etherscan is just under 50 million.
In the last seven days alone, the largest time on record, the total number of transactions rose to 800,000, of which 98.7% were made on Uniswap v2.
Overall, Uniswap v2 holds 64% of the DEX market, with IDEX and Ether Delta coming in second and third respectively.
This record explains why gas costs have reached all-time highs, with decentralized transactions flooding the ecosystem.
5. DeFi token prices reach historic highs
Finally, although the market has fallen slightly , one cannot ignore the fact that DeFi tokens were the first in the bull market, reaching all-time highs last month.
Topping the list is AAVE , which went from $ 53 in November last year to over $ 500 last month.
The Mark Cuban-backed lending platform was the first to offer secured flash loans in the space, and it is the second-largest DeFi project behind MKR .