DeFi, decentralized finance, is capturing the conventional stock market ecosystem and coming upfront as one of the strongest catalysts to promote digital currencies. The credit goes to the emerging lending protocols respecting decentralization, which are bringing socio-economic inclusion world-wide.
Reportedly, DeFi just surpassed the range of $7 billion funds locked in the space. The amount is approximately 271% up from the past two months. As per industry analysts, DeFi is on the go to surpass $27 billion markets by 2020 End.
Though not all DeFi projects are locking the massive amount and only a few are outperforming.
As of date, out of all the DeFi projects, the non-custodial lending and borrowing protocol Aave is ranking #1 and securing approx. 21.62% dominance in the decentralized finance space before MakerDAO’s Maker on the DeFi Pulse platform.
Both lending platforms are powered by Ethereum blockchain, wherein the total value locked in Aave and Maker is $1.54B and $1.41B, respectively.
Aave Limited, being the current largest DeFi platform, successfully overrides the time-honored dominance of Maker. The recent achievement of receiving an Electronic Money Institution license by the U.K. Financial Conduct Authority has upscaled the emotions of investors in the project. Also, the company is in the process of launching “Aavenomics” which will set the example of launching a governance token.
As per data, there are almost the top six decentralized projects locking about 90% of $7.13B capital in the DeFi space including Aave and Maker. The rest of the names are as follows- Curve Finance in DEXes category $1.16B, Synthetix (Derivatives) $851.0M, yearn. finance (Assets) $840.7M, and Compound is locking $794.1M under the lending category.
Frontier- The Emerging Player in Decntralized Finance Space
The DeFi market is visibly fuelling up with new and revolutionizing decentralized finance models which is one of the reasons space is procuring attention both from the retail and institutional investors.
In a recent update, shared with KoinPost, Frontier – the chain of an agnostic DeFi aggregation layer ($FRONT) raised approx. $1.85 million in seed funding in a Seed, Private, and Early Supporter raise led by industry heavyweights Alameda Research, FTX, Woodstock Fund, Mechanism Capital, Danish Chaudhry (Head of http://Bitcoin.com Exchange), NGC Ventures, CoinGecko, Spark Digital Capital, Black Edge Capital, AU21, TRG Capital, Bidesk, and Sandeep Nailwal (Co-founder of Matic Network).
The DeFi aggregator is reportedly one of the first batches of platforms that got listed on Project Serum (World’s first full decentralized derivatives exchange supporting trustless cross-chain trades).
Imp Call to Watch Before Investing In DeFi by Crypto Mavens
Recently, Vitalik Buterin in a cautionary post mentioned that investors are advised to have complete knowledge about any DeFi project. If naïve, then there are other “ETH dapps to explore them.”
While giving a reminder to the community, Buterin said that it’s not important to participate in the latest “DeFi thing” to be in Ethereum.
Also, the recent cases of Yam token and Dforce ($25 million hacks happened in April 2020) aware the investors to take heed before falling into the rush because of unnecessary FOMO in the decentralized finance space, and keep their money safe and secure.
The Yam incidence collapsed over $750,000 worth of cryptocurrencies where investors burnt the hardest when its price plunges to Zero within minutes on Aug. 13. Soon after that, the other major DeFi protocols like Compound, Yeran Finance, and Balancer sank in tandem.
Interestingly, the co-founder of Yam protocol pacified the situation by concluding that Yam protocol suffered a bug.
Similarly, Deforce also returned the hacked amount to the victims after fetching from the hackers in less than 24 hours.