Broadly speaking, DeFi is shorthand for decentralized finance, referring to the use of blockchain, digital assets and smart contracts in financial services such as credit and lending.
According to analytics site Defipulse.com, the $1 billion locked in the markets — i.e. across the spectrum of smart contracts, protocols and decentralized applications (DApps) built on Ethereum — is almost 60% denominated in MakerDAO’s DAI stablecoin.
Defipulse stats reveal that one year ago today, the value locked in DeFi was roughly a quarter of what it is now, at $276 million.
As it celebrates the milestone, some in the Ethereum community have pointed to the role played by the Bitcoin (BTC) lightning network, which accounts for 1.7% of the value ($8.5 million) — making it into the top ten digital assets used for DeFi contracts and applications:
ETH price correlation
As Cointelegraph reported last fall, while the dollar value chart of digital assets locked in DeFi shows some correlation to Ether’s price, it is not entirely dependent on it.
After falling with Ether’s price in July 2019, the value of assets locked in DeFi apps resumed its growth even as the altcoin’s price continued largely to fall. In a short time period, the correlation is tighter.