On December 18, DappRadar released the 2020 DeFi report. The report stated that DeFi projects will become the foundation of the crypto economy in 2021.
According to DappRadar’s data, by 2020, Dapp’s transaction volume has exceeded 270 billion U.S. dollars, 95% of which belong to the Ethereum DeFi ecosystem. This is an increase of 1178% from last year’s total of 21 billion US dollars.
The report pointed out that funds have been flowing from Bitcoin to ETH throughout the year, causing the exchange rate of ETH to BTC to continue to rise. The specific performance is the rise from 1:0.018 Bitcoin on January 1 to the current 1:0.028.
DappRadar speculates that DeFi’s attractive yield is “the main trigger for the flow of Bitcoin to Ethereum”, and wBTC and RenVM’s renBTC have played a key role in using Bitcoin’s huge liquidity reserves to fund DApps.
The report described 2020 as a “year when Dapp tried to grow at all costs”. The data shows that only 10 Dapps account for 87% of Ethereum’s total transaction volume.
The total number of active users of these 10 Dapps in November exceeded 1 million, of which the top three DeFi Swap (Crypto.com), Uniswap and Compound dominated with 930,000 active users.
The report pointed out that the limitations of Ethereum became obvious this year because the Ethereum network “actually encountered a bottleneck in terms of scalability,” and the flat gas fee was several times higher than last year.
In the second half of this year, network congestion accelerated the rise of competitors. DApp-supporting platforms such as Binance Smart Chain, TRON, and Wax accounted for a rapid increase in the total value of DApp transactions.
Among them, TRON is the first blockchain to catch up with Ethereum in terms of developing the DeFi ecosystem. So far, there are more than 70 Dapps on the TRON network. Most activities are concentrated in the top three Dapps. USWAP, JustSwap and UME generate more than 5,000 active wallets every day, accounting for 70% of the total activity in their DeFi ecosystem.
Binance Smart Chain (BSC) is another rapidly-developing protocol that has generated approximately $3 billion in transaction volume within a few months after its official launch. Although it is still a relatively small number compared with the annual trading volume of Ethereum, this trading volume has approached Tron’s annual trading volume of US$3.6 billion and EOS’s trading volume of US$6.5 billion.
In addition, the severity of hacker attacks and exploitation of smart contracts in DeFi projects is also increasing. DappRadar estimates that in 12 major incidents in 2020, more than $120 million of stolen funds will be stolen. Therefore, it predicts that “insurance will be the next important subcategory of the DeFi ecosystem.”
Rhythm has also seen analysis in other fields in the report. The report points out that although the NFT market has received a lot of attention recently, only moderate growth has occurred throughout the year. The “Games” category remained stable, while the “Spinach” category declined slightly.
Looking ahead, DappRadar predicts that DeFi will play a “more influential role” in 2021 and “form the foundation of the crypto economy” in all industries, including NFT, games, logistics and other Dapp categories.
