After a blistering start to 2021 saw token valuations and trading volumes surge to ignite the current bull market, the DeFi sector as a whole took a break while the NFT sector stepped into the limelight.
While investors’ attention was elsewhere, DeFi prices have had time to consolidate and project developers were able to focus on protocol upgrades and in the past month, DeFi-related tokens have been gaining traction and look poised for a breakout in September.
The recent bullishness in DeFi tokens prompted some analysts to point out that the ‘DeFi summer 2.0’ did in fact take place, and at a much larger scale than anyone anticipated.
Y’all wanted DeFi summer 2.0? Well it’s here, but at much larger scale and multichain.
First Matic with its $40M incentive program (1% of supply)
Then Avalanche with $180M (now worth ~$450M)
Today Fantom and Celo with $300M and $100M, respectively.
Solana and Terra next?
— Ryan Watkins (@RyanWatkins_) August 30, 2021
On-chain metrics show DeFi is heating up
Evidence that the DeFi space is heating up can be found in various on-chain metrics that indicate a healthy amount of trading activity and an increasing number of new users interacting with DeFi and DEX protocols.
According to data from Dune Analytics, the number of new participants coming into the DeFi ecosystem has risen non-stop over the past year reaching a record 3,285,643 total users as of Aug. 31.
One of the best examples of this has been the rapid rise of the Polygon (MATIC), a layer-2 network that has emerged as a top-ranking blockchain in regards to total value locked (TVL). Data from Defi Llama shows that Polygon is now the fourth-ranked chain in terms of TVL with more than $4.93 billion locked in the network.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.
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