ETH price effect? DeFi’s Total Value Locked crosses $18 billion

The previous year witnessed significant growth in decentralized applications. Total locked value locked (TVL) across all DeFi apps had hit $1 billion at the beginning of January 2020. A year later, DeFi TVL in dollars amounted to $18.3 billion, at press time, according to DeFi pulse.

Image Source: DeFi Pulse

Although Bitcoin attracted several major corporate investors last year, Ethereum also had its share of sharing the limelight. Amid Bitcoin’s rally to the $30,000 mark, even Ether breached $1,000 on price charts.

It comes as no surprise that TVL in DeFi will now see its numbers rise, as noted by Mati Greenspan, Founder of Quantum Economics who said

When Ethereum pumps it takes all the markets built on top of it along for the ride.

However, basing the TVL growth on ETH’s price rally alone may not be a clear indicator of growth in DeFi adoption. According to Dapp radar adjustment chart DeFi did not see much growth especially since October 2020 where TVL stagnated near $9 billion during BTC and ETH rallies. There was no overall inflow of new assets; rather, the growth is a result of the increasing value of the current asset supply.

Image Source: Dappradar

However, DeFi TVL has seen a significant rise in numbers from 4 January and 5 January, and seems to be nearing $20 billion.