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A major milestone in decentralized finance is currently being celebrated, as the LTV of all blockchain defi together have surpassed $100 billion, and although there are financial institutions worth much more than $100 billion, the difference is in the time in which they have achieved it, as many banks have taken years to achieve these successful figures, while defi is another story. None of these financial institutions has grown 490% in just 3 months, as on January 1, 2021 the defi ecosystem's LTV stood at $20.74 billion and only 3 months later it was already bouncing back as a large financial corporation with over $101.72 billion.
The DeFi ecosystem exceeded $100 billion in LTV.
What is it that makes DeFi so successful?
Because the way DeFi is run, it allows a world in which anyone could create transparent, fair and efficient financial products, making banks, large financial institutions, lenders and insurance companies to take a back seat, or become completely unnecessary and in the future disappear or cease to be relevant. In addition to interacting with these products freely and without absurd regulations. This is what makes Defi so successful.
And it is thanks to this way of doing business that has set a record in Defi's LTV, and if we compare it as a banking institution, it would be the 40th largest bank in the United States, surpassing even Silicon Valley Bank, and in fact it is already very close to surpassing BBVA in the United States.
And as expected, ethereum based defi's are the ones topping the list of most value locked, as so far of The Top 20 DeFi protocols in the market 14 of them are native to Ethereum with an aggregate LTV of $66.42 billion. Binance Smart Chain which is who is now waging a fee war and has become ethereum's biggest competitor, has 4 in the top 20 with $14.53 in total value locked, while synthetic asset platform, Terra's Mirror brings in $1.77 billion and multi-chain Autofarm rounds out the top 20 with $1.48 billion.
And as we see these impressive numbers achieved in such a short time, we wonder how much time is left for centralized and fully controlled finance, for as taskmaster mentioned in his publication and also edicted, the traditional banking system has less and less time left as it strangles and debours itself due to greed and stagnation due to the escape of control, also the traditional financial institutions offering annual returns are very low compared to what the defi can offer, and of course, even more so in these times where banks are increasingly up against the wall, in fact this is happening right now as banks and savings funds around the world are beginning to declare bankruptcy due to the terrible aftermath of the pandemic on the centralized economy which is a double edged sword.
So, what do you think of this milestone in defi LTV in general, do you think it will continue to grow, and if so (of course it will) how much do you think it will reach by the end of April? Let me know in the comments.
To conclude and as additional and complementary information, I recommend you to read Centralized platforms vs Decentralized by curation-man.