The total value locked (TVL) in decentralized finance applications has surpassed $1 billion, prompting celebrations from the Ethereum community. Not everyone has been swift to toast the milestone, however, with suggestions that the true value locked into defi protocols is materially lower. Meanwhile, creeping competition from centralized lenders shows that defi will have to innovate if it is to retain its value proposition.

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A Big Day for Defi

The moment decentralized finance advocates had been awaiting for weeks arrived on February 6, when the TVL of all assets in defi protocols exceeded $1 billion. At press time, that figure has receded slightly and is sitting at $997M., which tracks ecosystem growth, records Maker’s dominance to be 60%. The crypto collateralized stablecoin network is to defi what bitcoin is to the crypto market, its shadow looming large over proceedings.

Many of the decentralized lending, derivatives, and trading…

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