Space decentralized Finance, DeFi, badly injured in “black Thursday”, has not only recovered, but exceeded the March high of $ 1 billion locked on the platform assets as collateral for loans.
At the moment the volume of assets frozen, according to the DeFi web site Pulse, reached a new historic maximum, amounting to 1.53 billion US dollars.
Source: DeFi Pulse
Unprecedented volume, with a value of 2.91 million dollars, reached Ethereum (ETH), locked on the platform DeFi.
Source: DeFi Pulse
There is also the growing volume of blocked Bitcoin officially present at DeFi from may 2020 through the use of wrapped of Wrapped token Bitcoin (WBTC).
According to some analysts, thus DeFi affect the decline in demand ETH and BTC for cryptocurrency trades and helped to move the prices up.
Last week the token COMP, the Compound Protocol, based on Ethereum, passed into public control and began to be shared between users. The resulting hype helped Compound to press the leading platform DeFi, Maker DAO, through 554,8 million dollars, against the blocked security in the amount of 483 million dollars to the Maker of DAO, according to the DeFi Pulse. Compound officially supports tokens BAT, DAI, SAI, ETH, REP, USDC, WBTC and ZRX.
In the last few days Crypto Twitter users are actively discussing the high profitability of investments in DeFi.
Because of a confluence of factors, including the demand for borrowing cryptocurrency, incentives in protocols, platforms, DeFi, and lack of quick earnings at the auction, where today there is lateral movement of the price and uncertainty of trends in the short term, the attractiveness of investment in the segment of the cryptocurrency market DeFi has increased dramatically. DeFi now users can earn up to 100 per cent per annum on stable coins such as Coin or Tether USD (USDT), participating in lending programs.
It is superior to the traditional Bank account in the thousands of percent. If you place this income in a broader context, the hypothetical user can double nested thousand dollars and 10 years to increase your balance up to 512 thousand dollars.
However, such magic numbers, someone has to provide. “Risk-free” rate of return, which today promise some projects DeFi, is mainly achieved due to the fact that other traders reinvest the money in other speculative assets with leverage.
In addition, high interest rates or is provided temporarily at the expense of the arbitration, either due to increased ryski, which in such complex systems as DeFi there are so many, both for assets and for the security of the system. First, there are vulnerabilities in smart-contracts that are applied in the protocols of lending and assets. Crushing may be the process of liquidation of the contracts associated with extreme market volatility. Effect also have to the mistakes made by developers or users.
In his Twitter account on Saturday acne Buterin touched DeFi and risks that may not immediately occur for novice investors.
“Some of the benefits of project DeFi is their ability to completely eliminate intermediaries, fast and free cross-border payments, and the ability to pay interest to investors for tokens DeFi. However, focusing on price, high yield, and the overall mentality of “get rich quick” without proper end-user communication about the risks is not sustainable” – posted Buterin.
To DeFi got advantages over traditional financial systems, the need to improve cross-border payments, to remove the irritants associated with the traditional centralized financial performance, to ensure the stability and safety of the means of preserving the value and use of properties of existing financial assets, particularly stable coins. And these tasks need to convey to the whole of the crypto community.