DeFi is smaller than most digital assets – Messari

  • Messari researcher Ryan Watkins has compared the market values of DeFi protocols to other cryptocurrencies.
  • The combined total value locked in DeFi is around $3.71 billion.
  • Watkins concluded that DeFi needs capital reallocation. 

Messari researcher, Ryan Watkins, shed some light on how small the decentralized finance (DeFi) market is compared to other digital assets. 

The entirety of what we call DeFi is worth less than both XRP and Bitcoin Cash alone.

Despite its rerating over the past couple months, DeFi is still extremely small in perspective.

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— Ryan Watkins (@RyanWatkins_) July 28, 2020

According to DeFi Pulse, the total value locked (TVL) across all DeFi platforms is around $3.71 billion. That has been achieved in less than two months. In 2020 alone, DeFi TVL has grown by 440%. On the other hand, the total cryptocurrency market capitalization has only managed to surge by 68% during the same period. Of the total market cap for the cryptocurrency market (currently $324 billion), collateral locked into DeFi smart contracts is just 1.13%. 

Comparing the size of DeFi platforms in terms of market cap, Watkins said that they’re worth less than Bitcoin Cash, which currently has a $5.3 billion capitalization. Watkins also called the majority of altcoins “useless.”

The top 30 cryptoassets outside BTC and ETH is full of useless first-gen cryptocurrencies, ghost town “ETH killers”, and dead projects.

Watkins went as far as to say that even the meme coin, Dogecoin, was worth more than any of the DeFi platforms, except Maker. Doge currently has a market cap of $408 million, whereas Maker is only three places above it with $463 million, as per Coingecko.

The researcher added that DeFi tokens from platforms such as Aave, Compound, Synthetix, Kyber and 0x are smaller than most digital assets. Watkins concluded that DeFi doesn’t need new money flowing into cryptocurrencies to continue its growth, adding that all it needs is a reallocation of capital.

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DeFi is smaller than most digital assets – Messari
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