DeFi is the deal
Q3 2020 has been the best quarter of decentralized finance [DeFi]. Although this space is not a 2020 invention, its popularity reaching the peak was primarily catalyzed by the significant growth was the yield farming trend. This quadrant not only underscored Ethereum’s role as the underlying technology but also paved the way for its competitors, such as TRON and EOS.
Out of all the DeFi platforms on Ethereum, it was undoubtedly Uniswap that saw the most impressive quarter among the top five. According to the crypto-analytic platform ‘The TIE’, Uniswap started the quarter ranking 5th in the DeFi ladder with just $45 million TVL. At the end of the third quarter, it was positioned in the 1st place at $2.1 billion, an increase of 4,700%. Furthermore, in September, Uniswap became the 4th largest crypto exchange by monthly volume.
More broadly, in the third quarter, the TVL has skyrocketed from just $2 billion to $11 billion, noting an appreciation of more than 453%. And it’s up 1,560% year-to-date.
Assets and decentralized exchanges [DEX] saw the biggest growth. Both the sectors were up more than 1500% in TVL. In addition, all four main sectors, such as lending, DEX, assets, and derivatives, increased by triple-digit percentages. Leading the charts was the ‘lending’ market standing at a TVL of a whopping $4.5 billion while derivatives had the smallest increase in Q3.
Closely mimicking Ethereum’s price action, several DeFi tokens grew significantly. What further catalyzed the traction was the listing announcements of the tokens by popular cryptocurrency exchanges such as Binance, Coinbase, OKEx among others. DeFi tokens tanked shortly after the crypto market underwent several corrections.
But despite this, the returns were positive. Along the same line, The Tie mentioned,
“Returns were positive for 13 out of the top 20 DeFi tokens. The median DeFi asset is up more than 32% in Q3, while YFI saw astronomical returns of over 2,000%! The total DeFi market capitalization sits at $9.3 billion and represents 2.75% of the total cryptocurrency market cap.”