Value Locked in DeFi Hits $114.80 Billion, up 936% y-o-y

The level to which the decentralized finance and nonfungible token (NFT) markets have expanded in 2021 has been exposed by new data from analytics platform DappRadar. Crypto analytics platform DappRadar published its “Value Flow Report” on September 30th, stating that new advancements have seen significant growth in NFTs and blockchain games, but that DeFi is still producing significant value.

“Even though value seems to move from DeFi to NFTs to some degree, it seems that both groups are creating value on their own.”

The investigation focused on the Ethereum-based DeFi network, which has maintained its position as the dominating force in the industry despite the development of competing platforms such as Binance Smart Chain (BSC), Solana, and Avalanche. Value keeps pouring into the system, with bundled Ethereum up 400% since July 2020 and stablecoins Tether and Dai up 1,300% and 500%, respectively, during the same time.

DappRadar now reports a total value locked of $114.8 billion, representing a 936% rise since 2020, according to the company. According to the study, the industry’s total value added (TVL) increased by 75% from July 23 to September 5, hitting a high of $195 billion over all chains.

DappRadar did indicate that utilizing TVL to measure the movement of value was not a suitable method of doing so. In spite of the fact that TVL is one of the most significant measures for evaluating the present status of Decentralized Finance, it is not a measure for understanding value flow activity.

As a result, the TVL is entirely reliant on the underlying asset, which creates a misleading perception of value from a valuation standpoint.” At the moment of the research’s compilation, Ethereum-based collateral accounted for 68% of the total amount of collateral held in DeFi.

BSC is the second-largest blockchain with respect to total value locked (TVL), with $17.8 billion presently locked, accounting for 15.5% of the total value locked. With $8.7 billion in TVL, the PancakeSwap DEX leads the DeFi market on BSC.

According to alternative analytics website DeFiLlama, Polygon is the third-largest chain with respect to DeFi collateral on DappRadar, with $2.7 billion locked — but, the study did not include statistics for Solana, which has $9.5 billion locked, as per the report.

According to the study, NFTs saw record trading volumes in August, with a total value of $5.2 billion exchanged. Ethereum is also the most prominent network in the NFT sector, accounting for 90 percent of total transaction volume on its network.

OpenSea is the most popular NFT marketplace, with 99.7% of all transactions taking place on Ethereum despite the platform’s ability to accept USDC, DAI, and Polygon (MATIC) as payment alternatives for sellers. The study came to the conclusion that the development of NFTs has been organic and has not resulted in a significant loss of liquidity from DeFi protocols.

The value of DeFi is increasing on a consistent basis, while NFTs were able to produce a significant amount of value flow in August, according to the report. Notably, as China continues to tighten on the cryptocurrency sector, crypto investors are shifting more of their holdings into DeFi protocols, raising concerns about regulatory compliance in the US.