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DeFi (Decentralized financial applications) Funds Reach Close to 1 Billion USD

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Thu, 6/02/2020 - 19:14
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DeFi  (Decentralized financial applications) Funds Reach Close to 1 Billion USD
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A game-changing blockchain use-case, the sphere of decentralized financial applications, is going to exceed $1B in terms of amount of money locked in active contracts.

Approaching the first billion

According to the calculations of well-known decentralized finances explorer DeFi Pulse, the total volume of money locked in all DeFi  applications is close to $1 billion. In the early hours of February 5, 2020, it was  estimated at $920M, but by mid-afternoon it had surged from $950M to $970,8M.

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Image by DeFi Pulse

Mostly, this may be attributed to the rally of the Ethereum (ETH) price in recent days, as more than 66% of this sum is stored in Ethereum (ETH). Other significant shares of this amount belong to stablecoins, mainly DAI by MakerDAO.

The sphere of DeFi grew rapidly last month. Since December 31, 2019 it has grown almost 50% in terms of money operated by DeFi applications.

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Next big thing or digital forex? 

Decentralized finances (also DeFi) is a large class of decenralized applications delivering the services of crypto lending, crypto exchange, assets trading, derivatives trading etc. Globally, applications of this type strive to replace the traditional banking system through its blockchain-based analogues.

The most popular DeFi is the Maker crypto lending ecosystem. With Maker, everyone can open a Collateralized Debt Position (CDP), lock Ethereum (ETH) as collateral and get DAI against that collateral.

Related

By the way, the nature of this type of service is still in doubt for professionals. Recently, Brad Mills, venture investments partner and host of Magic Internet Money podcast, called DeFi 'digital forex'. Erik Voorhees of Shapeshift didn't agree with Mr. Mills.

Disclaimer: The opinions expressed by our writers are their own and do not represent the views of U.Today. The financial and market information provided on U.Today is intended for informational purposes only. U.Today is not liable for any financial losses incurred while trading cryptocurrencies. Conduct your own research by contacting financial experts before making any investment decisions. We believe that all content is accurate as of the date of publication, but certain offers mentioned may no longer be available.

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