This week saw a number of noteworthy developments and trends in the world of decentralized finance (DeFi), further bringing Defi to the attention of the general public on Crypto Twitter.
Latest developments in DeFi👇 pic.twitter.com/EfMNQtIDYF
— The DeFi Investor 🔎 (@TheDeFinvestor) January 27, 2023
First, the overall value locked in DeFi protocols has surpassed $40 billion, a new all-time high, especially on new chains like Arbitrum and Optimism where protocols grew exponentially in the number of daily users. This growth is being driven by a number of factors, including the increasing popularity of yield farming and the continued development of new DeFi protocols and products.
One protocol that has seen significant growth in recent months is Aave, a lending and borrowing platform that allows users to earn interest on their deposits and borrow against their collateral. Aave has seen its total value locked surpass $1 billion, making it one of the largest DeFi protocols in terms of overall value locked. Its V3 was also deployed on the Ethereum mainnet in the past week, making it much more efficient. This is a testament to the growing demand for decentralized lending and borrowing solutions, as well as the trust that users have placed in Aave.
Another trend that has emerged in the DeFi space is the growing popularity of yield farming. Yield farming involves lending or staking assets on a protocol to earn interest or rewards. Yield farming has become increasingly popular as it allows users to earn passive income on their crypto assets, and it also helps to increase the liquidity of various protocols. With protocols on Arbitrum like Swapfish.fi and Camelot Dex increasing in volume.
Vela exchange, a decentralized perpetual exchange on Arbitrum also launched its token Vela, using Camelot Dex as a launchpad.
Injective, a financial subchain built on Cosmos, announced a $150M seedfund raise to further support its development and infrastructure on the Cosmos chain, making it more efficient for users.
Gainvs Network, another decentralized exchange on Arbitrum also announced a trading contest with $100K in stables as trading rewards. Trading contests like this are usually done to better incentivise users of the exchange.
Overall, this week’s Defi roundup highlights the continued growth and innovation in the DeFi space. With new protocols and products being developed, and existing ones seeing significant growth, it is clear that DeFi is set to play an increasingly important role in the future of finance. However, it’s important to remember that the DeFi space is highly volatile, and the trend changes quickly. Therefore, it’s always important to do your own research and be aware of the risk involved in any investment.