Replies to post #2980 on Coinbase Global Inc (COIN)

[JohnCM]

DEFI UPDATE

Decentralized finance apps hit all-time highs

NFTs aren’t the only element of the Ethereum economy that are booming this summer. The universe of crypto-based lending, saving, and trading apps known as DeFi has also been breaking records. This week, the total value locked (TVL) — the total amount of money traders have put to work via various DeFi platforms — broke previous all-time highs set in May, reaching $165 billion. So what’s been fueling DeFi’s latest surge?

• Institutional investors attracted by high yields are increasingly interested in DeFi — including payment company Square and Wall Street giants like J.P. Morgan and BlackRock. According to the Chainalysis Global DeFi Adoption Index, the share of DeFi transaction volume conducted by large institutional traders rose from less than 10% in mid-2020 to over 60% in the second quarter of this year.

• MetaMask, a popular wallet option for DeFi, has seen its user count soar 1,800% this year. It now has more than 10 million users, up from around 600,000 last summer (and 5 million in April).

• A consortium of the largest DeFi apps have banded together to bring DeFi to “the 6 billon smartphone users around the world.” Using a crypto platform called Celo, the group (which includes Aave, Curve, and SushiSwap) aims to increase crypto adoption in developing economies.

• Decentralized lending platform Aave is the largest DeFi application, with $14.2 billion TVL. Aave is set to launch a dedicated lending platform for institutions “within weeks.” In other Aave news, Bitwise, the world’s largest crypto-index-fund manager (with over $1 billion invested) recently announced the creation of the Bitwise Aave Fund.

Why it matters… Even if you aren’t directly experimenting with DeFi, it’s good to know what’s happening in that world if you trade popular tokens associated with DeFi — like ETH, Solana, and Cardano. (And if you've been waiting for Cardano’s smart-contract functionality to roll out, developers promise the upgrade is imminent.) ETH now regularly sees greater trade volumes than BTC — and by market cap Cardano is now the third-biggest cryptocurrency while Solana is eighth.