DeFi is revolutionizing the ways of lending and borrowing on the new blockchain


Today, the total value locked in DeFi is just over $100 billion, at $112.29 billion.

While TVL has been on the decline since nearing an all-time high on April 3, last week’s Terra upheaval wiped out the majority of TVL stored in decentralized financial protocols. For investors, 2022 has been an eventful year, and cryptocurrency is no exception.

According to industry tracker DefiLlama, as of Monday afternoon, around $163.4 billion was locked in DeFi applications, including crypto lending, crypto transportation or crypto trading, a drop of 35% from compared to more than $252 billion in December 2021. According to Reports, which gathers and aggregates statistics on decentralized finance applications, the amount of money in DeFi has fallen by more than 12.5% ​​in the past 24 hours. .

DeFi’s new lending and borrowing avenues

According to Wil Barnes, CEO and co-founder of decentralized finance lending firm Jet Protocol, some of the flaws were in the technology that powers the apps.

Barnes cited a series of outages in January on the Solana blockchain, which is the basis of many decentralized financial applications. Traders have been powerless to dispose of their positions due to the disruptions that occurred during the last major period of crypto price declines. Investors were unimpressed by the disruptions, he said.

Borrowing and lending operations can be carried out in a decentralized way in the blockchain, where the parties involved in a transaction can enter into agreements with each other without the need for an intermediary or financial institutions using smart contracts. They are self-executing software with specific logic in which the rules of a transaction are contained (programmed). These loan regulations or conditions, which can be fixed interest rates, loan amounts or contract expiration dates, are applied automatically when specific criteria are met.

Ethereum dominates TVL in DeFi with 63.63% of the aggregate in DeFi, or $71.09 billion, from Sunday’s $112.29 billion. Binance Smart Chain (BSC) is connected to the second largest TVL, with 7.71% of the $112.29 billion, or $8.62 billion, held on BSC.

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