Total Ethereum Locked in Decentralized Finance Hits New All-Time High of 3 Million ETH

The total amount of Ethereum locked in the decentralized finance (DeFi) has recently hit a new all-time high above the 3 million ETH mark, meaning around $432 million are locked in DeFi apps.

Data from the decentralized finance tracking platform DeFi Pulse shows the amount of ether locked in these apps has been surging, going from 2.68 million ETH in December 2019, to over 3 million ETH at press time.

Total ETH locked in DeFiSource: Defi Pulse

The total value of funds locked in the decentralized finance space is currently close to the $700 million mark, and it also includes the BTC in the Lightening Network (LN). Most of the funds in the DeFi space are allocated to Maker (MKR) and its products, which represent a total of over $385 million locked.

The Maker platform supports the Dai stablecoin, letting users lock ETH and other cryptoasset as collateral to generate Dai as debt against t. Since the introduction of multi-collateral Dai, it also runs the Dai Savings Rate (DSR), which lets users earn interest on their stablecoin holdings.

Other popular applications in the DeFi space include decentralized exchanges like Uniswap and DDEX, and decentralized applications that let users earn interest on their ether and ERC20 tokens holdings, including Compound, dYdX, and the Nuo Network.

Overall, lending appears to be the main use case for DeFi, with over $500 million worth of cryptocurrency being locked in these applications. Decentralized exchanges only have about $42 million locked in them.

Earning Interest

Earning interest on cryptocurrency holdings has over the last few months become a hot topic in the space, with various cryptocurrency exchanges adding both lending and staking services to their offerings, in a bid to attract new users.

Competition has even seen exchanges go above and beyond to offer their users better interest rates. OKEx, for example, launched its OK PiggyBank in 2018 letting users earn interest on major cryptocurrencies like Bitcoin, Bitcoin Cash, Ether, EOS, and TRX.

As CryptoGlobe reported, last year it became the first exchange to offer Dai staking, matching the DSR’s then 4% interest rate, and adding exclusive additional rewards for its users. Similarly, this year it announced an annual yield increase for Tezos (XTZ) baking up to 107%.

Its new XTZ baking (staking) rates are already available via flexible staking periods that range from 30 days to an undefined flexible period. The latter can see users’ returns go up to 107% per year, OKEx’s announcement reads. These yields are settled with its native OKB token, and delivered to users’ mining accounts every day.

Other lending services out there include cryptocurrency wallets that give users passive income for simply holdings their funds there. These usually require users to go through know-your-customer (KYC) checks.

Featured image via Pixabay