People have lost confidence in centralized financial institutions since the GameStop incident and are interested in decentralized finance (DeFi).It is because DeFi platforms allow users to regain the autonomy of trading, where users can trade what they want and when. According to GoogleTrend, the popularity of the “Defi” has remained above 70 this year, and it even reached 100 from May 9 to May 15. Compared with the same period last year, people’s interest in DeFi has increased significantly.
The TVL of all chains has risen from US$14 billion at the beginning of the year to US$130 billion. Even in the market meltdown, the TVL fell to US$66 billion and rebounded to US$78 billion. The Polygon chain is growing at an amazing speed. From January 1 to May 11, its TVL soared from US$150,000 to US$5.3 billion, about 21,000 times; For BSC, it has increased by 87 times, while the DeFi leader Ethereum has only grown by about 5 times. In addition, according to Debank’s rankings, the BSC and Polygon projects have become the top ten platforms with the highest locked volume, suggesting that the growth of DeFi is no longer monopolised by Ethereum.
The Wharton School of the University of Pennsylvania released a report titled “DeFi Beyond the Hype”, pointing out that the development of DeFi, will create new financial tools and services Moreover, regulators will be more actively involved in the DeFi field sooner, especially when financial institutions and centralized financial institutions want to participate.
PricewaterhouseCoopers(PWC), Elwood Asset Management and Alternative Investment Management Association(AIMA) conducted the “Global crypto hedge fund report 2021”, stating that the demand of DeFi from the investors has grown significantly. the total crypto assets under management(AUM) hike 90% to reach US$3.8 billion compared with that in 2019. Among them, 31% of crypto hedge funds use decentralized exchanges, of which Uniswap is the most commonly used exchange (16%), followed by 1inch (8%) and SushiSwap (4%). Hence, DeFi is capable of replacing traditional finance and constructing a new global financial system once it becomes mature.