Although Ethereum is no longer the only smart contract playing in the space, it has maintained dominance on the market. This has led to an increase in adoption in the Ethereum blockchain, with the majority of developers choosing to deploy their decentralized applications (DApps) on the blockchain to gain the most exposure. As such, DeFi has boomed on the blockchain.
DeFi on the Ethereum ecosystem has not shown any signs of slowing down soon. The industry that has been booming for about a year now has continued its hot streak into the last lap of 2021. On top of the growth that has been recorded so far in the year, TVL (Total Value Locked) on the network has been on the rise.
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Layer 2 protocols have been rising in popularity among the Ethereum community due to the services that they offer and the lower fee on transactions using these services. As such, more investors have moved over to Layer 2 solutions like Arbitrum to access these perks. As the number of users of these solutions has risen, so has the number of funds locked in them.
In the past 7 days, the TVL on Ethereum Layer 2 solutions has risen to a new all-time high. The value hit $6.16 billion after growing 13.26% in the space of a week. This represents a significant increase in investment in the solutions as they become well-known.
Layer 2 TVL hits new ATH | Source: L2Beat.com
Arbitrium mainly led the charge, accounting for 43% of the total TVL locked in Layer 2 solutions. DYdX ad Boba Network followed with a total of $975 million and $863 million respectively. While Loopring placed 4th with a total of $580 million locked in the solution.
Ethereum has maintained its position as the leading DeFi platform in the crypto space. Earlier in the month, DeFi TVL had hit an all-time high of $275 billion. Most of this value was contributed by Ethereum, which made up about 67% of the total volume. Although other blockchains like Solana and Avalanche have tried to sneak up and steal market share from the network, it continues to dominate by a wide margin.
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Total DeFi TVL has since dropped from its all-time high in early November but has remained close to this figure. Presently, there is a total of $260 billion in TVL in decentralized finance protocols, only $15 billion less than its ATH.
ETH price struggles to hold above $4K | Source: ETHUSD on TradingView.com
Ethereum dominates this space with a total of $172.19 billion currently locked on the blockchain, representing a significant market share. Others like Binance and Solana have seen significantly less TVL. However, these projects are starting to win over the hearts of investors due to their lower fees and faster transaction times.
Featured image from Finextra Research, chart from TradingView.com