It has been another historical week for Decentralized Finance (DeFi). This week we’ve seen the total value locked (TVL) in DeFi protocols cross the $32 billion mark for the first time. This is an incredible success for DeFi, considering the total value locked in DeFi at the start of 2021 was just over $14 billion.
A key factor in driving DeFi’s growth this week has been the DeFi yield farming phenomenon. Over the past few weeks, we’ve seen the activity and the total locked value in yield farming applications surge. This is mainly due to the high APYs (annual percentage yields) and rewards users can get for depositing their digital assets in these yield farming protocols. Popular yield farming protocols like AAVE, Compound, and Uniswap have seen a lot of activity over this period, and this has helped push the total value locked in DeFi over $32 billion.
Other than yield farming driving DeFi up, this week we’ve seen several major DeFi infrastructure providers launch their products. One such example is Avalanche, a smart contract platform that allows developers to develop and deploy DeFi projects more easily. With Avalanche, developers can deploy projects at a fraction of the time and cost compared to existing solutions. This, combined with the high yields offered by yield farming, has resulted in a surge in DeFi activity overall.
This week has truly been remarkable for DeFi, with its total value locked crossing $32 billion and new infrastructure providers launching their products to support the growth. It is clear that DeFi has come a long way since 2021 and is only going to grow further in the future.
The rapid growth of DeFi signals a shift to innovative, blockchain-based financial technologies as mainstream financial architecture. This presents a unique opportunity for investors, developers, and users to get involved in the DeFi ecosystem and partake in the associated benefits. The next few months will be an interesting period for DeFi, and we’re looking forward to seeing where it goes.
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