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- With a TVL of just $2B at the start of 2021, Compound gradually achieved a five-fold growth to $10B TVL in just about three months
- COMP’s $150 price at the start of the year tripled to $454.4 and contributed a significant chunk to a 350% rise of the aggregate TVL across all DeFi platforms to $52.6B
- Lending platforms Compound (COMP), Maker (MKR) and Aave (AAVE) together contribute 46.5% of the aggregate total, and DEXs Uniswap (UNI), Curve Finance (CRV) and SushiSwap (SUSHI), the next 27.8%
Maintaining an impressive growth rate since the start of the year, the decentralized finance (DeFi) lending platform, Compound Finance, has become the first to achieve the $10 billion in total value locked (TVL) milestone. With over $15 billion deposit, it has already been leading in terms of liquidity supplied, and with recent developments, it has now surpassed previously leading MakerDAO in TVL.
Compound’s Gradual Growth
Compound’s (COMP) TVL at the beginning of the year was just $2 billion. Gradually the DeFi protocol exceeded a five-fold growth in just about three months, positioning it ahead of the $8.2 billion TVL sporting Maker (MKR). The difference boils down to the way DeFi Pulse calculates TVL. TVL is a measure of the value of assets committed to the DeFi platform’s products. Compound’s TVL decreases when borrowers remove assets from their smart contacts. Meanwhile, Maker mints DAI instead of direct funds withdrawal, and so its TVL is not affected by users taking loans.
Even COMP’s $150 price at the start of the year tripled to $454.4 at the time of writing, marking a significant increase in the public interest. COMP now boasts a market capitalization of $2.3 billion, ranking 58 in the overall cryptocurrency market. With over $10 billion TVL, Compound now dominates 19.4% of the $52.6 billion aggregate TVL across all DeFi platforms, representing a 350% rise since the start of 2021.
DeFi’s Remarkable Rise: with lending platforms and DEXs
Behind the DeFi space’s remarkable rise, the leading lending platforms have been the torchbearers. With Compound (COMP), Maker (MKR) and Aave (AAVE) occupying the top 3 spaces respectively and together contributing 46.5% of the aggregate total, next comes the decentralized exchanges (DEX). The most popular DEXs, Uniswap (UNI), Curve Finance (CRV) and SushiSwap (SUSHI), fill the following three positions respectively and account for another 27.8%.
This year played a salient spotlight for the DeFi growth, with significant crypto-contributors acknowledging its stellar performance, including billionaire Shark Tank investor Mark Cuban. With an investment trust for AAVE, January marked world’s largest digital currency asset manager, Grayscale Investments’ sally into the DeFi space, and indicating how invested the firm is, the following month recorded the launch of trusts for COMP, SUSHI and UNI.
DeFi Regaining its Lost Momentum
The non-fungible token (NFT) hype did steal the market’s focus the past few months. But now that the “NFT-mania” has calmed its flames, DeFi is once again gaining its momentum. And on top of DeFi platforms attracting impressive investments, DeFi pulse is also approving several new and promising projects to be built in the space.
With a background in journalism, Ritika Sharma has worked with many reputed media firms focusing on general news such as politics and crime. She joined The Coin Republic as a reporter for crypto, and found a great passion for cryptocurrency, Web3, NFTs and other digital assets. She spends a lot of time researching and delving deeper into these concepts around the clock, and is a strong advocate for women in STEM.
