DeFi’s Total Value Locked (TVL) Reaches New High of $78.7 Billion
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DeFi’s Total Value Locked (TVL) Reaches New High of $78.7 Billion

DeFi's TVL has double in just two months, as the value of stablecoins stored on crypto exchanges crosses $10 billion.
Neither the author, Tim Fries, nor this website, The Tokenist, provide financial advice. Please consult our website policy prior to making financial decisions.

According to data from DeFi Llama, the total value locked (TVL) in all DeFi protocols combined has reached a new high of $78.7 billion. At the beginning of March 2021, DeFi’s TVL was recorded at $51.53 billion, while back in November 2020, it was a mere $12.7 billion

As the numbers show, DeFi’s TVL has increased by more than x6 in a span of just five months. Among individual DeFi protocols, WBTC leads the charts with a market share of 10.15% and a TVL of $7.99 billion.

The four protocols that follow WBTC in terms of their TVL ranked in descending order are MakerDAO ($6.85 billion), Compound ($6.57 billion), Pancake Swap ($6.06 billion), and AAVE ($5.53 billion). Out of these five protocols, only Pancake Swap uses Binance for its chain, whereas the other four leverage Ethereum as their foundation. 

DeFi’s Total Value Locked (TVL) Breaks New Record

While most of today’s DeFi protocols leverage Ethereum, Binance Smart Chain (BSC) is gaining serious attention in the digital asset space. BSC-powered Pancake Swap experienced one of the sharpest growths in TVL when compared to the competition. 

On February 9, 2021, Pancake Swap had a TVL of $1.03 billion. By March 29, 2021, its TVL reached a figure of $6.07 billion—a growth rate that increases by six, in merely two months. As another BSC-powered protocol, Ellipsis Finance’s TVL rose from a figure of nearly $77 million to $1.87 billion within a period of five days. 

This is largely indicative of the significant growth in the DeFi ecosystem, where protocols powered by Ethereum, Binance Smart Chain, and several others continue to break records. Generally speaking, Ethereum is the king of DeFi—at least for today. But with BSC on scene, the competition is here.

Now, it’s not just the blockchains and protocols breaking records, but assets as well.

There are Now $10 Billion Worth of Stablecoins on Exchanges

According to data published by from March 29, 2021, the amount of Stablecoins held across all crypto asset exchanges has reached an all-time high of $10 billion. In September 2020, this amount was less than $2 billion. These numbers certainly add to the idea of stablecoins playing a legitimate role in the future of global payments.

Tether, or USDT—one of the most prominent stablecoins in the crypto market—witnessed a growth of 900% in one year, in terms of market cap. From a market cap of $4 billion in March 2020, it surpassed $40 billion by the time it was March 2021.

Growth in the Applied Value of DeFi

Such massive increases in DeFi TVL and the volume of assets held on exchanges indicate that more and more people are leveraging DeFi protocols. The data suggests increased collateralization from DeFi borrowers, which is certainly the case as an estimated 625k BTC are currently used as collateral. It also shows more and more lenders using DeFi platforms to turn their idle assets into streams of income. 

Depleting rates of returns from the traditional money market aggravated by an intermediary-ridden lending and borrowing system are likely driving this surge. Interest rates are near zero, and while that means it could be a good time to borrow, it also means savers are receiving a very low interest rate on their savings.

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Do you think DeFi’s ongoing surge is sustainable? Will DeFi see legitimate adoption thanks to the economic impact suffered from COVID-19? Please let us know your thoughts in the comments section below.