DeFi could have a bigger impact on ETH

While ETH prices remain stagnant, Ethereum's DeFi division has continued growth momentum.The Ethereum DeFi segment, locked in at $1 trillion in total value, has recovered nearly 80% after falling in March 2020.The emergence of DeFi could have a very large impact on Ethernet (ETH), even beyond the 2017 ICO boom. In recent months, the price of Ethereum has recovered from the "Black Thursday" drop in March. However, ETH has been able to return to its pre-drop levels. At the time of publication, the price of ETH was $234, up 4.27% in the last 24 hours and up 16.50% in the last 30 days.

In recent months, Ethereum price has managed to recover from the drop it experienced on the “Black Thursday” in March. At that time, the market collapsed due to the effect of the coronavirus pandemic. However, ETH has been able to return to its levels before the drop. At the time of publication, the price of ETH  was at $234 with gains of 4.27% in the last 24 hours and 16.50% in the last 30 days.

At the same time, the data show that the entire DeFi sector has grown by about 300% in terms of capitalization, while the market capitalization of the crypto market has only increased by 100% in the last year. In total, 2.25% of the total Ethereum supply is locked up in all DeFi applications. In this respect, Maker still dominates the sector with 48.15% and a locked-up amount of 485 million dollars.

In spite of this in the last few weeks ETH has been unable to stay above the important barrier of $240. Something similar has happened with Bitcoin as it has been rejected on multiple occasions after passing $10,000. Ethereum’s DeFi sector, however, has shown that it can grow even if the price of ETH remains stagnant.

As CNF reported, the growth of this sector has not gone unnoticed. Chris Burniske, a partner in the venture capital firm Placeholder, predicted that the next cycle of Bitcoin and Ethereum will be bigger than the 2017 boom, which in the case of Ethereum was driven by the ICO bubble. At that time, BTC and ETH reached their all-time high of 20,000 and 1,400 dollars respectively. Burniske expects BTC to rise to $50,000 this time and ETH to $7,500. With this in mind, Burniske said that the next cycle will be different from the one caused by the ICO bubble:

Not the ICO bubble, but another capital formation bubble will happen, standardized by code and legal as w/ ERC20.

A further sign of growth is evident from the data of Dune Analytics. The analysis company stated that the number of active users in the DeFi sector has grown exponentially over the years.

Finally, the data from Nyctale also shows a mixed reality in Ethereum’s DeFi sector. The degree of centralization continues to increase and is reflected in the number of addresses that the most important protocol tokens accumulate in the DeFi sector. The whales in this sector own most of the supply from Chainlink, MakerDAO, Ox Protocol, Kyber and Bancor. This is particularly negative for governance tokens, but it is positive for operators because it reduces the selling pressure in the marketplace.

Author : Reynaldo