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NAME: Decentralized Finance Power Unlock (Defi): Total value captured as the main metric
Introduction
The growth of Blockchain technology gave birth to a new financial era called decentralized funding (Defi). Defi platforms allow you to borrow, borrow and trade without any mediators allowing individuals and institutions to manage their property with greater safety and efficiency. One essential metric that emphasizes the potential of the Defi is the total value locked (TVL), which measures the total value of the value recorded in the Defi protocols through operations.
What is Locked Total Value?
The total locked value means the total value of the value transferred or locked in the decentralized program (DAPP) or the protocol for a period of time. In other words, it is the amount of all operations that occurred on the platform or network. This metric provides valuable insights into the acceptance and growth of the definitions of the Defi.
Why is it important to lock the total value?
In recent months, institutional investment and growing consumer base have increased the value established in Defi protocols. Here are some reasons why TVL is very important:
* The quantitative estimate of adoption : TVL helps to quantify the level of adoption of the Defi platforms, which is necessary to assess their potential impact on the wider economy.
* Growth Watching : TVL is a key Defi growth rate that allows investors and market participants to assess whether the asset class is growing or facing a decline.
* Influence on liquidity : As the TML increases, the liquidity for deffi protocols increases. Increased liquidity can result in higher prices, making the assets more attractive to investors.
Increase in total value locked
In recent years, TML has noticed huge growth with several noticeable stages:
* 2020 : 2020 TVL reached $ 10 billion compared to $ 1.5 billion in 2019.
* Q2 2021 : TVL for the first time exceeded $ 100 million.
Defi trends and forecasts
Defi’s future is bright, with several trends and forecasts forming its trajectory:
* Increased adoption : expect to grow the constant level of adoption as more institutions will enter the market.
* Regulatory check : The regulatory environment will remain a significant factor that promotes the development of Defi.
* Liquid extension : Improved deficiency of Defi protocols is expected to increase, making them even more attractive to investors.
Conclusion
The total locked value is vital metrics in understanding the growth and adoption of the definition protocols. As institutional investment continues to promote growth, TML will remain an essential indicator of industry opportunities. By observing this critical metric, market participants can better understand the opportunities and challenges faced by the Defi space, eventually making reasonable decisions on their investment.
Investor Warning
If you are going to invest in Defi protocols, remember that TML is just one aspect to consider. Explore thoroughly, evaluate your risk tolerance and consult a financial advisor before making investment decisions.
Additional sources
For more information about locked value and Defi space, review the following resources:
* Coingcko : The largest market capitalization of the cryptocurrency exchange.
* CoinmarketCap : The leading cryptocurrency data provider.
* Defi Lending : Platform providing insight to lending protocols.
