Many people think the DeFi space is accelerating quickly. Some statistics confirm as much, whereas others tell a different tale. Considering how only 2 projects have a market cap of over $1 billion, there is still plenty of room for growth.
DeFi is Still in the Early Stage
Depending on which statistics one looks at, DeFi is either in a good place, or rather minuscule. The total value locked in protocols and platforms is inching closer to $11 billion once again. This has been a bit of a crucial threshold for the industry. Surpassing it has happened before, but a sharp dip followed sharply after.
Additionally, it has become incredibly difficult for new platforms to surpass the “established three”. Uniswap, Maker, and Aave have remained in the top three for quite some time now. The only project coming close is Curve Finance. Wrapped Bitcoin is in there too, but that is in the eyes of many – anything but an actual DeFi project or protocol.
This is not due to a lack of innovation in decentralized finance. In fact, there are some very interesting products on the market, yet they seem to gain nearly no traction whatsoever. It is evident competition is crucial to keep things moving in the right direction. So far, that has proven to be rather difficult.
A few top Projects
One also has to wonder how to gauge the official DeFi “market cap”, so to speak. On CoinGecko, it includes projects like ChainLink. While that project offers tools for DeFi platforms, it does nothing for DeFi on its own. If that $4 billion isn’t counted, all of decentralized finance is valued at just under $10 billion. Not too impressive.
Additionally, there are two ventures with a market cap of over $1 billion. ChainLink and Wrapped Bitcoin, two projects that do not offer any DeFi functionality on their own. Neither does DAI, in third place. There are all assets to be potentially used in decentralized finance. For actual projects, Aave is the top dog valued at $640 million.
In terms of achieving a total market valuation akin to Ethereum, there’s a long way to go as well. Currently, DeFi has 33% of Ethereum’s market cap – assuming one includes ChainLink, WBTC, and DAI. Without those, the situation becomes very different.
Looking at the bigger picture, DeFi represents 3.8% of the entire cryptocurrency market cap. This percentile has not changed by much over the past month or so. Anyone expected DeFi to eventually trump Bitcoin will be sorely disappointed.