The total amount of money locked in Decentralized Finance contracts has seen a significant surge and have reached a worth of $900 million. DeFi is also being highly portrayed as the main driver of the growth of the Ethereum network as the funds have continued to increase. The earlier record of $852 million of invested funds has been broken again by a new high of $920million total funds. The flood of funds opens the gates for the fresh investments in the cryptomarkets, according to Mati Greenspan, licensed portfolio manager in the European Union.
The amount of money locked in #DeFi contracts just blasted through $900 million.
We’re going to a billion baby!! pic.twitter.com/RDU9TMcOwW
— Mati Greenspan [tweets are not trading advice] (@MatiGreenspan) February 2, 2020
Success Story of DeFi
DeFi has a significant role in enabling investors to lend or borrow digital assets through smart contracts where interest rates depend on the demand for an asset.
The DeFi has crossed all the expectations so far in the year 2020. Going by the numbers, there were $600 million funds in December which is majorly pushed by Maker’s DAO, the dominant non-collateral based stablecoin, which comprises the 57% of all the DeFi funds. It has been calculated that if the total hits $1 billion milestones, then the total funds locked in the defi will be equal to around 5% of Ethereum’s complete market capitalization.
The positive hopes of analysts around DeFi led the prediction of “Parabolic growth” in 2020 and beyond. The strong accelerated momentum is positive for both Ethereum and the future of cryptocurrency-related financial markets.
Decentralized Finances, The Next Big Thing in Crypto?
DeFi or Decentralized Finances propounded itself as a substitute for traditional finance, but the long path is required to travel before it becomes popular amongst everyday financial traders. The potential growth of DeFi is majorly dependent on the prices of Ethereum as it acts as a global standard for smart contracts and dapps.