- According to DeFi education platform DeFi Rate, the total USD value of crypto assets locked in decentralized finance platforms increased by almost 140% in 2019.
- Much of this growth can be attributed to the rapidly growing interest in MakerDAO.
The cryptocurrency lending industry exploded to prominence in 2017, when MakerDAO first went online—allowing DAI cryptocurrency holders to stake their tokens and earn interest, while crypto-asset holders could lock their assets in a smart contract to receive a DAI loan.
This innovation lit the flame of what would eventually become the Decentralized Finance (DeFi) industry, a rapidly growing sector that encompasses blockchain-based financial protocols, smart contracts, money-management tools and the decentralized applications (Dapps) used to interact with these.
Decentralized Finance (DeFi) is Already Exploding
According to DeFi education platform DeFi Rate, the total USD value of crypto assets locked in decentralized finance platforms increased by almost 140% in 2019, climbing to over $651 million by the turn of the new year. Now, this number already sits at more than $1.1 billion, indicating this growth is far from over.
Much of this growth can be attributed to the rapidly growing interest in MakerDAO, a decentralized autonomous organization that allows anybody to borrow DAI by putting up collateral. This DAI must be repaid later, in addition to a stability fee, paid in Maker (MKR) tokens.
As it stands, more than 2% of the total ether (ETH) supply is currently locked in Maker, with a combined value of over $500 million—equivalent to around 61% of total value locked in DeFi platforms.
It isn’t just Maker that has exploded in use in the last year either. According to DeFi Pulse, a variety of other DeFi platforms also skyrocketed last year,