The overall value of assets that are blocked in DeFi protocols grew by 271% in two months and exceeded $7 billion. If the current growth rate is maintained, this figure will reach $27 billion by the end of the year.
According to DeFi Pulse, today the value of assets that are locked in DeFi apps in dollar terms for the first time exceeded $7 billion, while almost 90% of crypto assets are locked in smart contracts in just six projects.
The largest DeFi protocol so far is Aave. During the month, the total value of assets blocked in the protocol grew by more than 300% and has already exceeded $1.53 billion. MakerDAO and Curve Finance are in second and third places in the list with blocked assets for $1.41 billion and $1.15 billion, respectively. They are followed by Synthetic, Compound, and Yearn.finance.
Aave recently became a flagship DeFi project after being licensed as an e-money issuer by the UK Financial Conduct Authority, signaling the sector’s growing legitimacy.
For a fast-growing industry like DeFi, bubbles and major project crashes are inevitable. Recall that recently, the DeFi YAM project, which gathered over $76 million in token sales, announced its closure due to a surfaced critical error in its code. In addition, the YFI token for managing the yEarn protocol raises a lot of questions – its price has increased by more than 1500% in a month and is now $13,548.
Some analysts speculate that the rapid growth in the DeFi industry is driven primarily by the rise in the price of crypto assets involved in the protocols. At current growth rates, DeFi-locked assets will reach $27 billion by the end of the year.
Industry leaders are concerned that the DeFi sector is growing too fast, Compound founder Robert Leshner stated on Twiter. The co-founder of Ethereum Vitalik Buterin also expressed his opinion on the situation:
“Reminder: You DO NOT HAVE to participate in the latest DeFi industry events to work with Ethereum. In fact, if you * really * don’t understand what’s going on, it’s best to stay on the side-lines or risk small amounts. There are many other decentralized apps on Ethereum, check them out!”
