Decentralized finance (DeFi) is financial services running on public blockchains such as Ethereum and Solana. It is an emerging ecosystem of financial applications and protocols built on blockchain technology with programmable capabilities. The transactions get executed automatically through smart contracts on the blockchain, which includes the agreement of the deal.
In a latest, Total value locked (TVL) in decentralized finance (DeFi) protocols is now a little over $200 billion, to date, according to tracking site DefiLlama.
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Total value locked (TVL) refers to the dollar value of the tokens held in smart contracts within DeFi protocols, such as lending or trading platforms. It is to be noted that these estimates are not perfect, since such trackers can count the same coins more than once.
According to DefiLlama, the total value locked in DeFi platforms across multiple blockchains has exceeded $200 billion. The majority of this resides on the Ethereum blockchain followed by Solana, Polygon, Fantom and Avalanche.
In September 2020, Bloomberg said that DeFi made up two-thirds of the cryptocurrency market in terms of price changes and that DeFi collateral levels had reached $9 billion.
MakerDAO, a stablecoin-based lending platform, is considered the first DeFi application to receive significant use.
Last year, Ethereum saw a rise in developers due to the increased interest in DeFi. However, despite Ethereum's strong market share and growing TVL, it has lost significant dominance due to the emergence of DeFi protocols on other chains. It has declined from 98% dominance in January'21 to 68.5% today. During that timeframe, however, its TVL increased by four times.