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As The World Of Cryptocurrencies Is Still Going Sideways, The Total Value Locked In DeFi Projects Continues To Rise And Surpasses $3 Billion

The crypto sector has seen a fair share of speculations over the past decade, but the recent decentralized finance (DeFi) boom has opened up new opportunities for crypto enthusiasts – to bet on DeFi’s development.

The Gnosis-based prediction market, Polymarket, created a betting opportunity for crypto enthusiasts to guess what will be the total value locked in DeFi before January 1, 2021. The betting started at $4.12 billion last week, but quickly jumped to as high as $5,16 billion, as of press time.

The predictions can be seen as PolyMarket being bullish on the future of DeFi.

Decentralized Finance usually operates by “locking in” a certain amount of crypto assets, primarily Ethereum but sometimes Bitcoin is locked too. In return, DeFi tokens and/or a promised interest are granted to holders. Interestingly, users are more and more interested in the DeFi sector, as its “locked-in” value rises exponentially.

Indeed, the total value locked in DeFi projects gained $1 billion dollars in just two weeks – DeFi struck the $2 billion mark on July 7, 2020, but as of press time the locked in value tokens increased to over $3 billion. However, this is not the first kind of bullish momentum for the sector, as three weeks prior to hitting the $2 billion mark the DeFi sector managed to make it into the billions.

Crypto experts are considering that a significant part of DeFi’s recent explosion is Compound’s governance token release on June 15, 2020. In just 24 hours Compound’s COMP token managed to surpass Maker and take the lead in the DeFi realm.

However, the experts are taking a rather cautious approach towards the betting, as there are little over $1,500 in bets, so a few large-scale bets could alter the prices and make them swing.

Furthermore, DeFi Pulse noted that the total value locked (TVL) has exploded several times before, but quickly rebounded. For example, the TVL went up from $692 million to $1.26 billion from January 1, 2020 to February 14, 2020. A month later, the TVL rate bounced back and went down to $600 million.

Meanwhile, the debate around DeFi token valuations divided crypto investors, as innovative protocols like Aave and Synthetix are with higher demands, compared to MakerDAO.

Investors are either undervaluing or overvaluing the DeFi sector. Some investors think that it’s a perfect time to jump aboard the DeFi social media hype, as the sector became the fifth-most searched crypto-related term on social media, as well as marking an all-time high in social media activities track.

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