DeFi in figures: TVL on Ethereum decentralized protocols grew 800% in 12 months

The popularity of DeFi decentralized exchanges and protocols on the Ethereum blockchain boosted Total Blocked Value within this ecosystem by 818% in the last year.

Ethereum continues to be the blockchain of smart contracts most widely used in the world for the development and use of decentralized applications and protocols. The blockchain, which has achieved strong expansion and growth in recent years, closed 2021 with more than $ 153 billion dollars deposited in its ecosystem DeFi (Decentralized Finance). To date, Ethereum dominates 62% of all the liquidity deposited in the DeFi, with a Total Locked Value or TVL of $ 146,490 million dollars.

Evolution and growth of the TVL in Ethereum DeFi in the last year.
Source: DeFi Llama

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What are DeFi?

DeFi are code-governed platforms or protocols and smart contracts that continue to gain popularity and adoption among those seeking a decentralized, no-middleman alternative to access financial services. Thanks to the properties of technology blockchain and smart contracts, DeFi users can access loans, credits, trade and exchange, investments, performance and more without the bureaucratic processes of banks and without the need to be banked. All it takes to enter this new financial world is an Internet connection.

In Ethereum, the leading network par excellence of this financial ecosystem, users have a wide range of options among its more than 390 existing decentralized protocols.

DeFi and Ethereum

Although Ethereum’s dominance over DeFi has diminished with the arrival of new and more scalable blockchains, and critics of the network continue to point to its expensive commission fees, Ethereum remains without a doubt the most important player in this digital financial ecosystem.

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Dominance of Ethereum and other blockchains over the DeFi ecosystem.
Source: DeFi Llama

Curve Finance, the dominant DeFi protocol

In Ethereum’s DeFi ecosystem, the most dominant protocol is Curve Finance, which locks in liquidity of more than $ 20.5 billion at the time of writing this article. Curve Finance offers a simple interface to exchange and trade stablecoins, which is why it plays an important role among stablecoin liquidity providers, who seek to minimize losses through a slippage or low slip.

According to data from DeFi Llama, Curve Finance has 14.05% of all the liquidity available in decentralized finance protocols, including the liquidity available in other blockchains. To date, this decentralized protocol has been implemented in various blockchains such as Terra, Solana, BSC and Avalanche, among others; which has further boosted its growth.

Decentralized exchanges and loans

Another platform that has been following the evolution and growth of DeFi on Ethereum is The Block. According to their data, the fastest growing decentralized protocols in 2021 were those focused on loans and exchanges.

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Total Locked Value in DeFi Ethereum protocols by category.
Source: The Block

The liquidity deposited in Ethereum decentralized loan protocols, such as Aave, Compound, Cream Finance, TrueFi, Rabbie Finance, among others, has grown 600% in the last 12 months. For their part, DEX or decentralized exchanges have seen their liquidity grow by more than 680% in the same period. Curve Finance, Uniswap, SushiSwap, Balancer, Bancor, Loopring, ShibaSwap, DODO, Kyber Network and DeFiSwap, are the most popular and used DEXs of the Ethereum DeFi ecosystem.

Regulators, the drivers of DeFi

The crackdown that countries are beginning to take against cryptocurrencies has only fueled interest in DeFi. The media specialized in digital economy, Fintech and startups, iProUP, highlighted the growth that decentralized finance platforms and protocols had after the restrictions imposed by China on Bitcoin and cryptocurrencies in mid-2021. At that time, decentralized protocols had significant growth, exceeding $ 150 billion in TVL for the first time. Also, the popular browser extension for cryptocurrencies and DApps, MetaMask, managed to reach 10 million active users after the regulations that the Asian power imposed on cryptocurrencies.

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DeFi in figures: TVL on Ethereum decentralized protocols grew 800% in 12 months

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