Total value locked in DeFi marks new all-time high close to $40B

The total value of booked in decentralized financing – a measure of the total value of assets committed to the DeFi system – reached a new all-time high close to $ 40 billion.

According to DeFi Pulse, the number reached $ 39.79 billion on the morning of February 10.

TVL chart by DeFi Pulse

While the bullish milestone is undoubtedly a reflection of rising prices across the crypto market, the metric, total value locked, or TVL gives a somewhat crude picture of what is really happening in the DeFi world.

This is because the metric largely ends up tracking the surface effect of missile value in US dollars to tokens such as Ether (ETH) and related assets locked as collateral in many projects and DeFi applications. When the value of the tokens increases, the value of TVL also rises logically, however, in the same logical way, a rise in the value of TVL is not necessarily a sign of increased participation or activity in the DeFi ecosystem.

For this reason, it is worth considering a parallel metric developed by DappRader, called the TVL mod, which tracks changes in the total value insured in an ecosystem while fixing asset prices at the start of the specific period under examination. This gives more information about what happens in the ecosystem without the “haze” of token prices are highly volatile and high and low.

Total total value is locked by DappRadar

DappRadar’s graph, although less exciting at first glance than TVL’s total figure, shows that there has actually been a steady increase in net asset flow to the DeFi ecosystem in the first months of 2021. As of February 9, it has been revised down. TVL’s figure was $ 19.15 billion, compared to $ 14.91 billion on Jan.1.

The year 2021 wasn’t short of coding milestones that the protagonists should celebrate. Bitcoin (BTC) is currently trading near $ 47,300 and Ether over $ 1,800. For technology developers and those who have invested in the long-term prospects for specific DeFi projects, the gradual and healthy growth of total adjusted TVL in the DeFi space would be less exciting, but still an important marker of their joint efforts.