DeFi Inflows Doubled in 2019

Crypto-based collateralized lending, and other forms of decentralized finance, host above $150 million in 2019.

DeFi is a growth sector in 2019, and funds held in various schemes have doubled in 2019. Despite the lack of regulations, using Ethereum (ETH) as collateral has changed the crypto landscape.

DeFi Pulse tracks the clear trend in expanding crypto lending. Beyond the absolute growth of funds, the last few months saw even faster inflows.

Crypto lending started off a few years ago, with rock-bottom lending rates of 0.5% for Maker DAO. Later, skepticism brough interest rates to above 20%, with the fear of a mass exodus and liquidations.

Now, trust is back and more than 1.793 million ETH is locked with Maker DAO. The issuance of DAI has increased to 102 million coins, with the permission to expand to 120 million.

So far, there is no clear definition of DeFi, but the chief aim is to build financial services, transfers, and some form of interest, solely based on blockchain assets. So far, the sector is unregulated, with no aim to gain a money management license or other types of oversight based on requirements for traditional financial companies.

ETH remains the chief asset for building DeFi solutions. But other projects also aim to take a piece of one of the hottest trends in crypto. TomoChain, once a scaling alternative for using the Ethereum Virtual Machine, has also pivoted into DeFi. Other projects like OmiseGo, have also chosen financial services as their business model.

DeFi in a way resembles the ICO drive, which aimed to displace stocks. In the end, the ICO trend ended, as tokens fell under the rules of security law and projects faced fines or cease-and-desist orders. So far, DeFi services have not triggered regulators.

DeFi is a way to offer products without exchanging fiat. Variations of the products also include payment systems, as well as derivatives trading.

Forms of DeFi may also arrive to the EOS network. For now, the demand for ETH has kept the coin above $180 and often close to $190.

Reading now