To our DeFi Community,
This week we’re celebrating Ethereum’s 5th Birthday. Five years full of financial innovation and experimentation.
In five years, Ethereum sparked a new movement. One pioneered by the Bitcoin community. But now we’re here to take the torch and carry it to billions of people who are boxed out of the existing financial system. And bring in the billions of people locked in the current system with no way out.
In five years, we’ve seen two multi-billion-dollar bubbles fueled by Ethereum’s open financial infrastructure. The ICO bubble in 2017/18 ushered in a new wave of capital and interest in the Ethereum ecosystem. It was the first major instance of DeFi as ICOs represented permissionless capital formation for anyone in the world. And it’s safe to say the party got wild. Over $15B was raised in 2017 and 2018, almost entirely on Ethereum. Projects were raising absurd amounts with the most notable being EOS, which raised a monstrous $4B from its token sale. No comments on that one.
Naturally, we had to deal with our hangover. The past two years following the ICO bubble resulted in an immense amount of sell pressure as ICO treasuries were selling off their ETH to fund the development of their protocol or application (…or they exit scammed/gave up). But now Ethereum has sobered up. And now we’re starting to make moves on the back of new financial primitives as two years of heads-down building finally comes into fruition. We can now swap, lend, borrow, leverage, bet, and a whole other suite “money verbs” right at our fingertips. Exactly what we envisioned. With that, our next bubble points to DeFi. Yes, it’s a bubble. It’s already worth billions of dollars and rising quickly. In fact, total value locked is officially parabolic right now.
But how high will it go? Sure, we’re eventually due for a cooldown period (probably soon rather than later looking at the TVL graph). But it’s just getting started. Remember how we’re aiming to help billions of people? Well, the number of DeFi users is optimistically around 300K. That’s only 0.03% of the way there.
Major tech companies like Amazon, Apple, Microsoft are worth trillions right now too. Ethereum, a 5-year-old technology aiming to establish itself as open infrastructure for global finance, is worth $0.035T. And the cumulative value of all of DeFi is $0.004T. Even when we take a more granular look, the market capitalization of DeFi asset barely registers in the lens of the crypto market. Out of the $283B+ in circulation, DeFi represents 1.4% of that value.
In just five years, Ethereum has bootstrapped two multi-billion-dollar bubbles fueled by financial innovation. And the second one is only getting started.
Something truly beautiful is brewing in crypto right now.
Years of research and iteration are taking forth right before our eyes 👀
You can hear it in people’s voice when they talk – the excitement is back and very well could be here to stay.
— Cooper Turley 🔥_🔥 (@Cooopahtroopa) July 31, 2020
It’s been a wild ride so far. I can barely imagine what the next five will bring.
So Happy 5th Birthday, Ethereum. Here’s to the next 5!
- Highest Yields: Bitfinex at 67% APY (not recommended) or Aave at 7.9%
- Cheapest Loan: Maker at 0% with ETH collateral or Compound at 6.2%
Find more lending & borrowing rates on our Rates page!
The money markets protocol announced its governance & token upgrade focused on decentralizing the protocol towards self-sustainability
Dharma announced a Uniswap integration for seamless token swaps. And no gas fees!
The DeFi liquidity protocol known for its 9-figure ICO launched V2 on Ethereum mainnet
The decentralized communication platform is pivoting to a new fixed-rate lending protocol with their acquisition of Sablier
In Other News…
- Synthetix dissolves foundation in favor of Community DAOs
- DerivaDEX closes $2.7M investment round from leading DeFi investors
- FTX Announces Solana-based DeFi DEX – Serum
The Stat Box
- Total Value Locked eyes $4b
- DAI supply reaches 364M
- DEX volume hits $1.95B in 7 days
- DeFi closes in on 300,000 users
- Matcha reaches $70M in cumulative volume
- InstaDapp TVL doubles in a week to $264M
[Haseeb Quershi – Bankless] DeFi in ETH2: Cities, Suburbs, Farms
[Spencer Noon – Our Network] Issue #32: YFI, MakerDAO, Terra
[Kain Warick – Synthetix] Advice to DeFi Founders
[Cooper Turley – 🔥_🔥] Hello World
[Matthew Spoke – Forbes] Blockchains Must Eat Their Own Dog Food
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Analyst at Bankless – one of the leading resources for open finance. Lucas is an active contributor to the DeFi ecosystem with appearances in other notable DeFi outlets including The Defiant and Our Network. He has years of experience working with dozens blockchain and token startups where he focused on token economics, marketing, and growth.