Total Locked Capital (TVL) in the crypto markets, a measure of how much money is deposited in smart contracts, has dropped from $160 billion in mid-April to $70 billion today. That was the lowest level since March 2021, while a 66% drop could be a concern. But a lot of data also suggests that the decentralized finance (DeFi) sector has good flexibility.
TVL totals are broad metrics, meaning it lacks other details, such as the number of DeFi transactions, the growth of Layer 2 scaling solutions, and unreflected inflows of capital in the ecosystem. to see
Layer-2 is the path to sustainable DeFi growth.
Iakov Levin, CEO and Founder of Midas Investments, said: “We firmly believe that the current bear market is not the end of the DeFi industry. decentralized exchanges on Layer-2 Ethereum scaling like Optimism and Velodrome with a TVL worth over $130 million.”
Optimism is an Ethereum scaling solution using Layer-2 to combine off-network transaction monitoring, reduced processing costs, and transactions for decentralized applications on the network
Levin believes that scaling solutions will evolve. decentralized applications to the next level in a way that is not possible during the so-called “DeFi Summer 2.0“By Q3 2021, Ethereum network transactions averaged above $25, making it almost impossible for applications to gain acceptance,” said Levin, CEO of Midas Investments.
“Ultimately, I view Layer-2 as a potential factor in revitalizing the growth of this sector. This will be driven by the increased scalability brought about by the use of optimistic solutions and zk-Rollups, enabling lower transaction fees to users. and almost instant transaction confirmation, and Layer-2 will greatly improve the user experience. And soon there will be the ability to pull new users into the system.”
Metamask Swap and 1inch network are outstanding.
The number of active wallets using the DeFi application has been reasonably stable over the past 30 days, according to data from DappRadar.
The data shows that the wallet is active. Down by an average of 2%, but four of the top 5 applications saw growth. In addition, DEX aggregators 1inch Network and MetaMask also saw significant user profits.
In summary, the decentralized finance industry It continues to grow in the number of active wallets, venture capital investments, and innovative solutions that offer cheaper and faster computing capabilities compared to the latest peak at the end of the year. 2021
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