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DeFi’s second wind has started!

Photo of: Nathan VDH
by Nathan VDH

Is DeFi losing steam? Numbers seem to indicate the contrary! The total value of cryptocurrency engaged in decentralized finance (DeFi) now stands at 13.7 billion dollars. As for the number of users, it has increased by 55% in the last 6 weeks.

After the euphoria of the summer, the protocols and tokens of decentralized finance (DeFi) seemed to mark time. After a stabilization phase, they are once again following a growth trajectory, just like Bitcoin and the Altcoins.

At least one indicator shows this. As of August 1, the total value (TVL) of funds allocated to decentralized finance reached 4 billion dollars. Since September, it has been stable at around 11 billion.

According to DeFi Pulse, which measures total value locked, it has been engaged in a new growth cycle since November 8. Thus, on November 13 at 9:00 am, this figure was approximately 13.74 billion dollars.

Several DeFi protocols are driving this growth. These include Uniswap, whose smart contracts have a crypto value in excess of $3 billion. But Maker, WBTC, Compound, Aave, Harvest Finance and Curve are also growing.

However, DeFi remains a highly concentrated market. The seven main DeFi protocols alone account for about $11.7 billion of the total LTE of decentralized finance.

However, these are no longer the focus of growth and other services are also growing. Better still, the DeFi Top 3 is no longer as dominant. Harvest Finance is thus probably the protocol of the moment. More options for customers are a great sign.

DeFi’s reference platform for asset farming, Harvest Finance has almost doubled its Total Value Locked in just 24 hours. Between November 11 and 13, it rose from $473 million to $911 million.

However, be careful of a possible reversal. On October 26, the protocol already attracted more than a billion dollars in cryptocurrencies. Three days later, this amount was down to nearly $310 million.

According to CryptoQuant CEO Ki Young Ju, the current trend in DeFi can be explained by investors’ fascination with “high yield and risk-free strategies”.

He continues: “For conservative investors, betting on DeFi projects is a better strategy than owning or using other risk-free strategies such as arbitrage on exchanges.”

This interest is also reflected in the strong increase in the number of DeFi users. Dune Analytics counts approximately 860,000 unique user addresses. Their number has been multiplied by 10 over a year.

But the progression is especially strong since October (+55%). Last month, the number of addresses jumped from 555,000 to 775,000. And in the first 11 days of November, 85,000 new users arrived.