Messari research suggests that DeFi isn’t as big as it seems

Messari research suggests that DeFi isn’t as big as it seems
DeFi can take Ethereum higher than 2017 bull run

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  • Messari researcher Ryan Watkins recently looked into the true size of the DeFi sector.
  • His estimate shows how small DeFi really is, with only $3.71 billion in total value locked.
  • This amount, while near DeFi’s ATH, still makes it smaller than many individual projects, like BCH or XRP.

The DeFi sector has been growing rapidly over the last several months, and despite it existing for years now, it only started attracting serious amounts of attention in 2020. However, according to a recent report by Messari crypto researcher, the DeFi market might still be quite small when compared to other crypto assets.

DeFi’s huge growth still makes it quite small

Messari researcher, Ryan Watkins, recently decided to provide an assessment of the true market value of decentralized finance (DeFi) sector. He found that the entire DeFi market is actually quite small, despite what the surge in interest made it seem to be.

Watkins shared his findings on Twitter, stating that “The entirety of what we Call DeFi is worth less than both XRP and Bitcoin Cash alone. Despite its rerating over the past couple months, DeFi is still extremely small in perspective.

As can be seen from the tweet above, the DeFi sector has around $3.71 billion in total value locked. This is quite close to its all-time high, which comes after months of build-up and positive reports. Of course, this is quite impressive growth, which increased the TVL value by 440% in less than two months.

Even so, it is still only 1.13% of the crypto industry, which makes it only a tiny fraction of blockchain-based products.

DeFi vs the crypto industry

Granted, DeFi has seen much bigger growth than the crypto space. In fact, while DeFi grew by 440%, the crypto space only gained 68% over the same period. But, while DeFi has $3.71 billion to its whole market, the crypto market stands at $324 billion, in total.

Even when compared to individual cryptocurrencies, DeFi still holds less than XRP or Bitcoin Cash, as mentioned earlier.

Of course, the top two coins — Bitcoin and Ethereum — are hard to beat. Together, these two projects hold over $239 billion on their own. Even with them excluded, the Layer 1 projects collectively hold around $45.7 billion.

In fact, Watkins said that, outside of BTC and ETH, the top 30 cryptos are full of ‘useless first-gen cryptocurrencies, ghost town “ETH killers”, and dead projects.’