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Ethereum Price Surge Pushes DeFi TVL Past $60 Billion

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A surge in the price of Ethereum at the time of writing has pushed the total value locked (TVL) in Ethereum DeFi to over $62 billion while inflation-adjusted TVL sits at the $42 billion mark according to data from DappRadar. 

Source: DappRadar

Adjusted TVL is a unique metric from DappRadar that adjusts the total value locked in Ethereum DeFi protocols based on a fixed Ethereum price set 30-days prior. In this way, an additional representation of the amount of value locked in DeFi can be seen as fluctuating token prices can distort the true value.  

In the last 12 months, the price of Ethereum has increased 1376% from $169 to $2,109. The latest Ethereum price rally began around Thursday 25th March when the price bottomed out at around $1,572. Since then the price has continued to increase and now sits at $2,109 at the time of writing. A 16% 7-day increase and a 25% increase in the last 14-days. 

In part, this remarkable rise in the value of Ethereum is due to excess money flowing into all the leading cryptocurrencies, which are now seen as a relatively safe store-of-value and a good speculative investment amidst increased media attention. Furthermore more people are becoming educated into the world of blockchain, cryptocurrencies, and DeFi, as the market with potential buyers keeps growing.

We are also seeing unprecedented interest right now in non-fungible tokens or NFTs. Most leading NFT marketplaces operate from Ethereum and most notable sales are taking place in ETH or WETH again adding to the strength of Ethereum’s proposition right now.   

Source: CoinGecko

Gas prices have fundamentally priced out the very investors needed to achieve mass adoption on Ethereum. The impending arrival of Ethereum 2.0 is being hotly discussed in the industry as a slew of layer-2 and alternative blockchains jostle for a market share amidst these high gas prices. 

Blockchains such as BINANCE Smart Chain and its large ecosystem of DeFi dapps are offering cheaper and faster transactions to customers looking to move hundreds rather than thousands – something not so important up until late 2020 and 2021 it would appear. Still, Ethereum maintains its vice-like grip over the industry – but for how long.   

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 4/6/2021

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