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While the entire crypto industry is on a more recent bull run, analysts have identified that the sector is experiencing more influx of funds.
Available information on Defillama has shown that the decentralized finance industry has reached a new all-time high of $210 billion in total value locked. This growth was achieved thanks to the many projects tied to it. For example, in recent memory, DeFi projects like Fantom and AnySwap have seen their TVL rise by 140% and 114% growth, respectively.
Notably, the TVL share of popular DeFi projects like Curve, Aave, and MarkerDAO are unsurprisingly the largest contributors to the growth of the sector. Collectively, these projects hold around $43 billion of the TVL, representing nearly one-fourth of the entire DeFi industry.
While the entire crypto industry is on a more recent bull run, analysts have identified that the sector is experiencing more influx of funds. This is corroborated by a chainalysis report on DeFi. According to the report, “Large institutional transactions, meaning those above $10 million in USD, accounted for over 60% of DeFi transactions in Q2 2021, compared to under 50% for all cryptocurrency transactions.”
Though blockchains of assets like Solana, Cardano and others have been making the round for the different Defi projects being built on it, Ethereum, which is the second-largest crypto asset by market cap, remains the most preferred blockchain as it hosts several DeFi projects on its network. This is quite notable considering the fact that the network has had challenges of high gas fees which are usually caused by congested networks.
Many DeFi projects have simplified services that the traditional finance sector had hitherto monopolized. With DeFi, its users have access to making passive income through giving and taking loans in stablecoins. Apart from that, its use cases have also been explored even in insurance and other human sectors.
Also, the Chinese ban of all crypto-related transactions within the country has also led to the popularity of the space in the region. The move had led to the fall out of many centralized exchanges thereby leaving citizens of the country no option but to trade using available decentralized exchanges. This led to one DEX, dydx, having a transaction volume that surpassed that of Coinbase for the first time.
Interestingly, as the space is expected to keep booming, we would witness the entrance of several institutional investors who could be looking to tap from its many potentials. Already, Soros fund has already declared an interest in carrying out more research about the space. This research could precede its intention to invest some time in the near future.