Guesser Launches DeFi Total Value Locked (TVL) Options on Augur
Options on the performance of the DeFi industry are now open to traders
Decentralized Finance (DeFi) is creating a new paradigm that proposes quite an attractive alternative to fiat-world lending, assets and derivatives markets, with the advantages offered by decentralized p2p protocols. Anyone with an internet connection can now take out a loan or trade on open markets on the Ethereum platform.
Many DeFi projects require users to lock up an asset (ETH, DAI…) in order to participate in the protocol, add liquidity to a market, or mint a new asset. These assets locked as collateral have created a measurement for the track record of these applications, called total value locked (TVL).
According to data from Defipulse, at the time of writing, the total value locked in DeFi amounts to over $450M, having decreased in recent weeks after an all-time high of $683M in late June.
As the chart shows, over the past two years the DeFi space has gone from birth to over half a billion dollar’s worth in assets locked. Amazing numbers for an emerging industry, aren’t they? What if you could predict its trend?
You now can. Today, Guesser is launching a weekly prediction market on the amount of ETH locked in DeFi according to Defipulse, and will later add longer term markets such as monthly or quarterly options.
These are great news for ethereum traders, who can now profit off the overall performance of DeFi in addition to leveraging each of the protocols and their functionalities. The market Will the Total Value Locked (ETH) in DeFi be between 2.4M and 2.7M on September 1st? is now open for predictions!
An overview of DeFi
As we mentioned before, within this space we can differentiate several kinds of applications.
Lending has captured the majority of the market with over $400M locked today, which accounts for nearly 90% of the TVL in DeFi. Moreover, there is a single application that runs the entire space with a currently over 55% of dominance: Maker. This is a decentralized credit platform on Ethereum that supports Dai, a stablecoin whose value is pegged to USD and collateralized in ETH. At present, more than $250M worth of Ether are locked in Maker contracts, which has led the growth of the space since its launch in early 2018.
But despite lending’s great dominance, there’s still room for several services that complete the existing offer in the DeFi industry. One example is derivatives platforms. Projects such as Synthetix and Augur have a market share of 4%, having aggregated $35M in TVL at its peak in June 2019. Despite its current size, there is great growth potential in the existing market for these applications.
Decentralized exchange protocols, commonly called DEXs, are vital to the success of Ethereum and building a globally inclusive financial system. Uniswap is the most prominent exchange in the space at the moment, with $16M locked at the time of writing, and sharing with Bancor and Kyber Network a 5% of the DeFi TVL. Finally, payment and asset networks have a combined DeFi TVL share of 3%.
As we have seen, over the last two years DeFi has walked its first steps and is now a space capturing the eyeballs of many in finance. In the not too distant future we’ll start to forget a centralized banking system to start operating with open protocols which allow virtually anyone to interact with financial products. Very relevant things are happening on the Ethereum platform in an era that will undoubtedly be shaped by the cryptocurrency revolution.
Cowritten with Jose Garay