DeFi value locked grows, NFT sector receives a boost

01 Oct 2021

DeFi and NFT markets have grown considerably in 2021, according to new research out on Friday by analytics platform DappRadar.

According to its “Value Flow Report”, DappRadar says recent trends have seen substantial growth in nonfungible tokens and blockchain gaming, and decentralised finance is also creating significant value: “Although the value flows to some extent from DeFi to NFTs, it appears that both categories are generating value independently.”

The research focused on Ethereum-based DeFi, which remains the dominant force in the sector, despite rival networks Binance Smart Chain, Solana, and Avalanche, Cointelegraph reports. Wrapped Ethereum has risen 400% since July last year, whilst Tether and Dai have soared by 1,300% and 500% respectively over the same period.

According to DappRadar, there is a current $114.8 billion total value locked (TVL), a 936% rise over last year. The report went on to say that the industry’s TVL rose 75% between 23 July and 5 September, peaking at $195 billion. However, DappRadar stated: “Whilst TVL is one of the most important metrics to assess the current state of decentralised finance, it is not a metric to understand value flow movement. The TVL is completely dependent on the underlying asset, thus, providing a false optic from the value perspective.” 

Moreover, the report showed record volumes of NFTs in August, with $5.2 billion traded. Ethereum remains the dominant network in the NFT market, with 90% of all volume on its blockchain, the Cointelegraph report adds.

The leader in the NFT marketplace is OpenSea with 99.7% of its trades taking place on Ethereum. The report added NFT growth has not stripped much liquidity from DeFi protocols: “All in all, it appears that the value in DeFi is growing constantly, whilst NFTs were able to generate a major value flow in August.”