Decentralized Finance: A Primer
DeFi Overview & Irrefutable Growth
Decentralized Finance (DeFi) is a vertical within the digital asset space that allows users to access financial services without centralized intermediaries. It became the first breakthrough application of smart contracts, having been in development since 20171. Leveraging smart contract functionality on different blockchains, DeFi strives to create a more accessible, efficient, and transparent financial system.
DeFi’s breakneck adoption is evidenced by metrics on all fronts. Total Value Locked (TVL), a measure of capital locked inside Layer-1 networks or DeFi protocols, reached $1 billion in May 2020 and breached $250 billion by the end of 2021. Market capitalization of DeFi coins grew from $1.7 billion before peaking at $170 billion in November 2021, representing a 5.6% of total crypto market capitalization. DeFi’s product-market fit also began reflecting in revenue figures, as some of the largest protocols collected a cumulative $4 billion in fees as of February 2022.
Going Back to the Roots
But DeFi hasn’t always been the $150b+ market capitalizat...Unlock this article by joining our Community!
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