Title: Unlocking the power of decentralized finances (DEFI): Understanding of the total value blocked as a key metric
Introduction
The increase in blockchain technology has given birth to a new era in finance, known as decentralized finances (DEFI). Defi platforms allow loans, loans and pairs, without the need for intermediaries, allowing people and institutions to administer their assets with greater security and efficiency. A crucial metric that highlights Defi’s potential is the total blocked value (TVL), which measures the total amount of value blocked in defi protocols through transactions.
What is the total locked value?
The total blocked value refers to the total amount of value transferred or blocked in a decentralized application (DAPP) or protocol for a certain period. In other words, it is the cumulative sum of all transactions that have taken place within the platform or network. This metric provides valuable information about the adoption and growth of the DEFI protocols.
Why is the total blocked value important?
The value blocked in the DEFI protocols has become increasingly significant in recent months due to an increase in institutional investment and a growing user base. Here are some reasons why TVL is crucial:
* Quantification of adoption : TVL helps to quantify the level of adoption of defi platforms, which is essential to measure its potential impact on the economy in general.
* Growth monitoring : TVL serves as a key growth indicator in Defi, allowing investors and market participants to evaluate whether an asset class is increasing or facing a decrease.
* Liquidity influence : As TVL increases, so does the liquidity available for defi protocols. This increase in liquidity can lead to higher prices, which makes assets more attractive to investors.
THE INCREASE OF Total Value Blocked
TVL has seen tremendous growth during the past year, with some notable milestones:
* 2020 : TVL reached $ 10 billion in 2020, compared to $ 1.5 billion in 2019.
* Q2 2021 : TVL exceeded $ 100 million for the first time in the second quarter of 2021, establishing a new record for Defi.
Defi trends and predictions
Defi’s future is brilliant, with several trends and predictions that shape his career:
* Augmented adoption : Wait continuous growth in adoption rates as more institutions enter the market.
* Regulatory scrutiny
: The regulatory environment will continue to be a significant factor that drives the Defi development.
* Liquidity expansion : Improved liquidity is expected to increase in the DEFI protocols, which makes them even more attractive to investors.
Conclusion
The total locked value is a vital metric to understand the growth and adoption of DEFI protocols. As institutional investment continues to boost growth, TVL will continue to be an essential indicator of industry’s potential. When monitoring this critical metric, market participants can better understand the opportunities and challenges faced by the space, ultimately, making informed decisions about their investments.
Inverter Alert
If you are considering investing in Defi protocols, keep in mind that TVL is just one aspect to consider. Investigate thoroughly, evaluate your risk tolerance and consult with a financial advisor before making investment decisions.
Additional resources
For more information on the total blocking value and the Defi space, see these resources:
* Coingcko : The greatest exchange of cryptocurrencies for market capitalization.
* CoinmarketCap : A leader of cryptocurrency data.
* DEFI LINDING : A platform that provides information on loan protocols.