Every week, IntoTheBlock brings you on-chain analysis of top news stories in the crypto space. Leveraging blockchain’s public nature, IntoTheBlock’s machine learning algorithms extract key data that provide a deeper dive into the major developments in the industry.
ETH’s All-Time High & DeFi’s Resurgence
For the first time, Ether has reached a market cap of over $300 billion as its price surpasses $2,700. The recent increase comes as activity on the Ethereum blockchain and applications built on top of it continues to grow.
Asides from hitting a new all-time high, Ether has also reached 0.05 BTC, a nearly-three-year high relative to Bitcoin.
As Ether’s price has grown, so has the amount of activity on the Ethereum blockchain. The number of transactions on a given day taking place on Ethereum recently set an all-time high of 1.51 million.
A significant portion of the activity on Ethereum is taking place in decentralized finance (DeFi). The most common way to track the growth in usage in DeFi is through the total value locked (TVL) in these applications.
In case you are unfamiliar with TVL, it represents the aggregate dollar amount stored within applications such as decentralized lending platforms (e.g. Compound), decentralized exchanges (e.g. Uniswap) or insurance platforms (e.g. Nexus Mutual). The total value allocated to these platforms can be thought of as the amount entrusted by users to supply to benefit from the financial services these offer.
TVL has already grown more than 4x this year from $16 billion to over $64 billion, just on the Ethereum blockchain. After decreasing for a few weeks, TVL just hit a fresh new high.
The growth in adoption of DeFi tokens is reflected in their token valuations. DeFi tokens also reached new highs recently.
Overall, Ethereum has seen an increasing amount of traction in 2021. Through its burgeoning DeFi ecosystem, crypto may finally have its first killer application asides from speculating. While the growth in the space is reflective of the broader bull market, on-chain activity and adoption directly affects price action as crypto markets continue to develop.