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Current State of DeFi: Maker, Aave, Compound Remain on Top

  • DeFi year-to-year growth has exceeded 33%.
  • Most DeFi assets currently outperform cryptocurrencies.
  • Maker, Aave, and Compound continue rising as leaders, with Maker holding 16% dominance.

It’s been a good year in the DeFi space so far. According to CoinMaketCap, all top 10 DeFi tokens are currently trading up. The combined Total Value Locked (TVL) has also grown by over 30% year to year.

Source: DeFi Pulse

Of note are Maker, Aave, and Compound. Of these, Maker is currently ranked first with a market dominance of 16.82% and $5.71 billion TVL. This Ethereum-based DeFi lender started the year just below $3 billion TVL.

Yet, Maker has managed to almost double in 6 weeks after a period of stagnation in December 2020. Also, the Maker Community is currently voting on adding Uniswap v2 LPTs as a new collateral type. If accepted, Uniswap will join at least 7 other collateral types including Ether. This shows that Maker is bracing to expand even more.

Coming in second is Aave, another Ethereum-based lender. Aave has a market cap of $6.10 billion, according to CoinMarketCap. It recently reached an ATH of $5.62 billion TVL on Jan 6 but dipped to $5.28 billion.

However, Aave is rebounding and is now at $5.51 billion. Economic safety grade provider Gauntlet has also given Aavo a real-time rating of 95% at the time of writing.

Of note, Aave recently launched Aave 2 and initiated migration from Aave 1 on Jan 28. Aave has coined its protocol 2 as the “future of Aave” and is encouraging users to migrate slowly to avoid paying high fees.

As an Ethereum-based platform, Aave has been negatively impacted by the recent rise in Ethereum fees. Fees are a factor of network usage. Currently, Ethereum is trading at $1,681.42% after rising 22.61% over the last week.

Ethereum reached a new ATH of $1,500 and analysts are predicting it will go up to $2,000. As Ethereum rises in popularity, so does the cost of transacting on the blockchain.

Lastly, Compound has a current market cap of $2.25 billion with a TVL of $3.99 billion. Compound’s TVL has been steadily increasing since November 2020 from $1.405B to an ATH of $4.106 billion on Feb 6. Although it dipped a little, the chart below shows signs of an imminent rebound.

Source: DeFi Pulse
Source: DeFi Pulse

In comparison, of the top 5 cryptos, only 1 has gained in the last 24 hours, according to CoinMarketCap.  As DeFi continues to outperform some top-rated cryptos, this proves that DeFi and cryptocurrencies are not necessarily always correlated. 2021 might prove to be an even better year for DeFi.

Tina Mutare

Avid reader and writer with a passion for sharing crypto news and trends. Uses her background in finance to help readers better understand the crypto market and investments. Hopes to see mainstream crypto adoption in the near future, especially in Africa.

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