Why Was There a Lack of Movement in ETH Despite DeFi’s Growth?
- Decentralised finance has got a pretty significant footprint in the cryptocurrency ecosystem that has been in the making over the past two years.
- In fact, the market itself is worth over $800 million at the current time of writing.
- When you take into consideration that the DeFi apps are built on Ethereum, there is a huge positive movement that isn’t reflected in the price of ETH.
Decentralised finance, otherwise known as DeFi, has got a pretty significant footprint in the cryptocurrency ecosystem that has been in the making over the past two years. In fact, the market itself is worth over $800 million at the current time of writing.
On the Ethereum blockchain, DeFi apps are definitely one of the more bigger decentralised apps (dApps) and with the launch of MakerDAO, ETH decentralised apps hold more than $10 million worth of digital assets.
When you take into consideration that the DeFi apps are built on Ethereum, there is a huge positive movement that isn’t reflected in the price of ETH. The second-largest digital currency is currently down more than 85% from its ATH and when you compare that to bitcoin, Ethereum is essentially worthless - especially compared to what it was back into 2016 or even in the highs of 2017.
Recently conducted research from Longhash attempted to understand the inability of decentralised finance apps in affecting the price of ETH.
When looking into the report, it was indicated that despite the growth and interest in these decentralised apps, the level of activity was nothing compared to the levels attained during the ICO bull run bubble at the end of 2017.
It was explained by Delphi Digital that the Ethereum locked in different decentralised finance applications at the moment is just over 3 million. This is crazy compared to the 16 million ETH that was raised from 2016 to 2018.
The post went on to say:
“It should be noted that this was at a time when ETH’s supply was even lower (ranging from roughly 81 million to around 101 million), which means ICOs were accounting for an even greater percentage of the currently available supply of ETH.”
When you look back into 2017 and the overall bull market that saw cryptocurrency go to highs we haven’t seen since, it makes you wonder what the future holds. The general bull market was the key force behind ETH is ATH in 2017 and the same kind of demand for price has not been exhibited from the ecosystem of decentralised finance apps since.
It will be interesting to see how this situation plays out. For more news on this and other crypto updates, keep it with CryptoDaily!