DeFi Continues to Grow Exponentially
The DeFi market cap continues to increase as more money gets poured into the nascent space. According to the latest data from CoinGecko, the total market capitalization of the top 100 DeFi coins is now over $8 billion.
That said, the figure should be taken with a pinch of salt as different websites have different metrics to determine the DeFi market cap.
For instance, the market cap of the top 100 DeFi tokens — according to DeFi Market Cap – still hovers slightly above $7 billion. This billion-dollar difference can largely be attributed to the omission of Chainlink’s market cap which happens to be the largest DeFi coin in CoinGecko’s list.
However, this does not take away from the tremendous growth of the DeFi space in a relatively short period of time. The rise of DeFi could be attributed to multiple factors, including the “yield farming” euphoria and the growing popularity of protocols that give users the opportunity to provide liquidity to token pools for attractive rewards.
The growing popularity of DeFi can also be blamed partially for the recent surge in the price of ether (ETH) as the vast majority of DeFi protocols lock the token, thereby creating supply scarcity for the token.
As previously reported by BTCManager, at the beginning of June, the total DeFi market cap stood at $2 billion. Within weeks, this figure surged to $4 billion and has now doubled at the beginning of August.
Similarly, BTCManager reported how MakerDAO had become the first DeFi protocol to hit $1 billion in total value locked (TVL) accounting for 27.62% of the entire DeFi market cap at the time.
Not All Is Rosy
Despite the promising growth of DeFi, skeptics argue that it is a bubble waiting to go bust.
Prominent crypto personalities, including Ethereum co-founder Vitalik Buterin, have raised concerns over the sustainability of the budding space as unknown and “moonshot” DeFi tokens register ridiculous price gains ranging from 20x to as high as 1000x.
Further, concerns also remain pertaining to the security of DeFi protocols as in June, the Balancer protocol succumbed to a cyber hack resulting in the loss of funds to the tune of $500,000.