The whole Ethereum community is out to toast to a significant milestone with the massive success of its Decentralized Finance (DeFi) protocols and applications. The ecosystem’s huge growth this year opened the door to a billion-dollar achievement on total value locked (TVL).
Current reports, particularly those from Defipulse.com, tracked a substantial increase of investments within Ethereum’s DeFi ecosystem. Despite dropping to $993.3 million as of press time, it cannot be denied that the $1 billion mark had been crossed. With consistent efforts, they managed to stay on track from $700 million locked-in accounts recorded last December 2017, to $1 billion by February 7.
Notably, 60% of the total amount locked in the markets are denominated in DAI, MakerDAO’s stablecoin. The milestone significantly reflects the community’s vision of a distinct future for decentralized finance.
According to the reports, the process of calculating the total value figure requires getting the overall balance of Ether (ETH) as well as the other ERC-20 tokens used in DeFi smart contracts on an hourly basis. Then, these balances would be multiplied by their spot prices in the US dollar.
As it turned out, Bitcoin (BTC) lightning network, with a 1.7% ($8.5 million) part on the total value, had been recognized as one of the major assets constituting DeFi applications and contracts. Bitcoin even made it on the list of top 10 digital assets being used by investors for DeFi-related dealings.
DeFi crosses the $1 billion mark.— evan.ethereum.eth (@evan_van_ness) February 7, 2020
Thanks to Bitcoin's Lightning Network for contributing 8.5m to get it over the hump!
However, as emphasized in recent industry reports, even if the dollar value chart of crypto assets held in DeFi contracts and applications showcase some correlation to the price of Ether, the token’s value does not depend on it entirely. For instance, last July 2019, the price of ETH fell while the value of assets held in DeFi apps showcased incredible growth around that time.