From yield farming on Curve with tokenized bitcoin to making flashloan trades via Uniswap, the breakout of cryptonative DeFi earning opportunities in 2020 has attracted an unprecedented influx of capital in short order. Now, this increasing influx has helped DeFi achieve its latest milestone: $7 billion in total value locked (TVL).
The DeFi Surge
DeFi projects collectively crossed the $7 billion TVL mark on Wednesday, August 26th, according to analytics website DeFi Pulse.
TVL can be understood as a cryptonative stand-in for how “assets under management,” or AUM, is used in traditional markets. It’s a metric the Ethereum ecosystem has rallied around as a growth tracker for the DeFi sector.
Of course, a rising TVL is validating and suggests users are increasingly finding dApps in the space to be useful and reliable.
For context, DeFi’s TVL only reached the $1 billion milestone for the first time back in February 2020. Then things really started picking up steam.
Time Between #DeFi Milestones
$1 billion locked: 917 days
$2 billion: 146 days
$3 billion: 20 days
$4 billion: 4 days
$5 billion: 12 days
$6 billion: 4 days
$7 billion: 10 days
— Spencer Noon (@spencernoon) August 26, 2020
Ethereum DeFi’s current TVL of $7.13 billion (not $7.25 billion as the image below suggests, since we’re excluding the $12 million worth of BTC currently locked in Bitcoin’s Lightning Network) makes future milestones of $10 billion and beyond seem all but inevitable. Why?
This space has only just begun to pop off. When you combine influxes of mainstream newcomers and institutions with non-Ethereum crypto users that are beginning to come around to DeFi, things start to heat up and assets keep flowing into and through these protocols.
There’s a New DeFi Leader in Town
Before August 2020, lending protocol and…