Ethereum maintains the largest market share of the decentralized finance (DeFi) market. DeFi has boomed through 2021 and market crashes have not slowed down the space. DeFi protocols have seen a high rate of adoption among users. With networks like Solana and Cardano unveiling capabilities to enable them to compete with the top DeFi platform, Ethereum.
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Despite the arrival of new competitors to the space, Ethereum has not faltered in its dominance over the decentralized finance space. Total value locked in Ethereum alone ahead of ETH 2.0 launch has now surpassed 6.5% of its total circulating supply. Culminating in more than $25 billion now staked on the Ethereum network. The addition of TVL in DeFi pushes this number way higher with Ethereum as the leading smart contracts network in the industry.
Ethereum Leading With 69% Of TVL
Decentralized finance has grown so much in the past year. More protocols launch into the market every day to bring DeFi services to users and more money flows into the space. Data from Defi Llama shows that the TVL (Total Value Locked) in the DeFi space has now passed a record-breaking $200 billion. Currently, there is $220.2 billion TVL across multiple DeFi protocols and blockchains, and this number is growing by the day.
ETH price trailing above $3,400 | Source: ETHUSD on TradingView.com
Ethereum alone accounts for 69% of the DeFi TVL, with $139 billion currently locked on the Ethereum blockchain. Solana holds the second largest market share with only 5.44% of the market share and $11.03 billion in TVL. The combined market share of Ethereum and Solana leaves the rest of the market with a little over 26% of TVL shared among 47 DeFi platforms.
The Curve protocol dominates the market with 7.63% total market share and 10.22% market dominance in Ethereum TVL. Saber maintains the highest dominance on the Solana network with 26.05% of its TVL.
Leaving Centralized Exchanges For DeFi
Exchange balances for Ethereum have dropped in the past couple of months. This is the exact opposite of what happens during bull markets, where coins are moved to exchanges so they can be sold for profit. But 2021 has seen differing trends despite the bull market. ETH exchange balances have dropped about 15% from the height of the rally in May from 21 million to a present volume of 18 million.
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A leading cause for this has been the growth of decentralized finance. Investors are moving their ETH coins from centralized finance into DeFi protocols to enable them earn returns on their crypto holdings. Last month, ETH saw record volumes leaving centralized exchanges when $1.2 billion worth of ETH was moved in a single day. As decentralized finance continues its growth, exchange balances are expected to drop further with more ETH being moved to DeFi platforms.
Featured image from The Daily Hodl, chart from TradingView.com