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Messari crypto researcher, Ryan Watkins, has recently delved into the market values of the decentralized finance sector, comparing it to some of the other players in the crypto industry. He concluded that DeFi is still a minnow despite its massive growth in popularity this year.
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.
— Ryan Watkins (@RyanWatkins_) July 28, 2020
The total value locked across all DeFi platforms is close to its all-time high of $3.71 billion, according to Defi Pulse. That epic feat has been achieved in less than two months, and this year alone, TVL has grown by 440%.
DeFi is Still Tiny
Comparatively, the total crypto market capitalization has only managed to gain 68% over the same period. As a percentage of the overall market cap for crypto, which currently stands at $324 billion, collateral locked into DeFi smart contracts represents just 1.13%.
Watkins compared the size of the DeFi platforms in terms of market cap and stated that combined. They’re worth less than Bitcoin Cash, which currently has a $5.3 billion capitalization. He added that it is an order of magnitude smaller than all of the Layer 1 blockchain projects, aside from BTC and ETH, combined, which are collectively worth $45.7 billion.
Worthless Altcoins
Pretty much labeling the majority of altcoins worthless, Watkins added:
“The top 30 cryptoassets outside BTC and ETH is full of useless first-gen cryptocurrencies, ghost town “ETH killers”, and dead projects.”
Comparing individual DeFi platforms, he observed that even the meme coin, Dogecoin, was worth more than all of them with the exception of Maker. Doge currently has a market cap of $408 million, whereas Maker is only three places above it with $463 million, according to Coingecko.
Other DeFi protocol tokens from platforms such as Aave, Compound, Synthetix, Kyber, and 0x are smaller than the ‘useless’ Shiba Inu based token. The researcher went on to lambaste other cryptocurrencies labeling Litecoin as ‘dead,’ and IOTA as ‘unworkable.’ It is true that in terms of market performance at least, several high cap cryptocurrencies such as XRP, BCH, Litecoin, and EOS have managed very little this year.
Watkins concluded that DeFi doesn’t need new money flowing into crypto to continue its rise, adding that all it needs is a reallocation of capital.