The Decentralized Finance (DeFi) craze doesn’t appear to be ending soon, but is rather maturing with time. Even though the community has noticed a rundown in activity lately, that isn’t exactly true, as the total value locked now appears to be stabilizing at a mass psychological barrier of $12B on Oct 26, according to DeFi Pulse.

As expected with the launch of UNI token, Uniswap dominance has now crossed 23.77% and the protocol has reached $2.76B in locked value. Next up significantly is the quantity of BTC tokenized on the Ethereum blockchain, which has now passed 160,000 Bitcoin worth over $2B! 

Total value locked on DeFi applications has crossed $11.62 Billion
Total Value Locked in DeFi – defipulse

Bitcoin on Ethereum

Unsurprisingly, the majority of the BTC on Ethereum is concentrated in WBTC (Wren BTC) which holds over 111K BTCs worth $1.46B! In comparison, Bitcoin Lightning, which is a layer 2 DApp native to the Bitcoin chain, only has 1K BTCs locked worth around $13.6M. Despite the custodial nature of WBTC, users still seem to mint most wrapped Bitcoins via the service, but tBTC might gain prominence in the future. 

The total amount of Bitcoin locked in DeFi applications has crosses 160 thousand
BTC locked in DeFi – defipulse

Why is Bitcoin tokenized on Ethereum?

The BTC equivalent tokens WBTC, renBTC, tBTC, sBTC, HBTC, TBTC, pBTC, imBTC etc… have seen a meteoric rise in popularity and usage. Since most DeFi applications are built on Ethereum, Bitcoin holders were excluded from participating in them. To solve this, Bitcoin can be tokenized 1 to 1 on the Ethereum chain. e.g. you send 5 BTC to the WBTC protocol, and it gives you back 5 WBTC. WBTC is an ERC-20 token and you can now access a myriad of DeFi services such as borrowing, lending and investing in DeFi. 

The Bitcoin owners can now put their asset to use, instead of merely holding it. It’s being projected by analysts that Bitcoin equivalents will rise in both popularity and value, in the future, considering the great utility and financial benefits.

DeFi leaders

The rest of the leader-board looks the same, MakerDAO or the DAI currency system occupies the second position with $2.12B TVL. WBTC which has recently gained much influence and ground is now number three with $1.46B. Old favorites, Compound and Aave occupy the fourth and fifth spot with $1.08 and $1B TVL locked respectively. Harvest Finance has kept the seventh spot despite the recent exploitation of its contract. It controls $590.8M in TVL as its set to release its v2. Yearn Finance is holding strong at number 10 with $331.3M TVL.

Top 10 DeFi projects classified by total value locked
DeFi market leaders by total value locked – defipulse

DeFi has slowly increased its market share over the years, but the time between acquiring the next billion dollars has steadily declined. It means that the transition from $1B to $2B was much slower than the transition between $10B to $11B. The transition being faster is indicative of exponential growth and we hope to see more billion barriers being crossed in the near future! 



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Disclaimer: The authors of this website may have invested in crypto currencies themselves. They are not financial advisors and only express their opinions. Anyone considering investing in crypto currencies should be well informed about these high-risk assets.

Trading with financial products, especially with CFDs involves a high level of risk and is therefore not suitable for security-conscious investors. CFDs are complex instruments and carry a high risk of losing money quickly through leverage. Be aware that most private Investors lose money, if they decide to trade CFDs. Any type of trading and speculation in financial products that can produce an unusually high return is also associated with increased risk to lose money. Note that past gains are no guarantee of positive results in the future. 

Posted By

Taha Zafar

Blockchain Expert. DeFi Enthusiast. Skilled in Fundamental Analysis and All Things Crypto.

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