As of October 1, 2023, $39.50 billion has been placed in decentralized finance (defi) platforms. Let’s take a look at the top five categories, highlighting the diverse range of defi protocols, the number of applications, and the wealth they encompass.
A look at 5 Defi categories that manage billions in crypto assets
Defillama.com, a decentralized aggregator of the financial (defi) industry, showcases a range of defi protocols, their underlying blockchains and their values. It features about 35 unique categories of applications. The scene is dominated by liquid staking derivatives applications, 119 of which hold $23.05 billion.
The total value is locked (TVL) in defi as of Sunday, October 1, 2023 at 8:00 PM Eastern Time.
Liquid staking derivatives represent tokens backed by staked assets in blockchain networks, allowing users to remain liquid while their assets are staked. Essentially, they let you earn staking rewards without tying up your assets, by converting them into tradable tokens.
The total value locked (TVL) in the top five categories in defi as of Sunday, October 1, 2023 at 8:00 PM Eastern Time.
Lending, the number two in defi, includes protocols that allow users to lend or borrow assets. About 302 protocols fall under this credit umbrella, collectively holding $15.14 billion in crypto assets as of October 1, 2023. Closely following, the decentralized exchange (dex) category claims the third position with total value locked (TVL) of $11.82 billion across 1,026 protocols.
Dex protocols are platforms that allow users to trade crypto assets directly with each other, without the need for an intermediary or central authority. Essentially, dexs offer peer-to-peer trading, making transactions transparent and secure on the blockchain.
Fourth in the defi landscape is the bridge category, protocols designed to transport tokens between networks. These bridges act as vital links between various blockchain networks and currently manage $9.17 billion across 46 different platforms. Securing the fifth position in the defi hierarchy is the CDP category, or the collateralized debt category.
CDP defi protocols allow users to pledge assets as collateral, giving them the opportunity to borrow various assets or tokens. At their core, they provide loans anchored to the value of the pledged collateral, allowing users to tap into funds while keeping their primary assets safe. A remarkable 105 CDP protocols exist, amassing a combined value of $8.23 billion.
Following the ranks of liquid staking, lending, dex platforms, bridges and CDPs are protocols that focus on returns, real-world assets (RWAs) and derivatives. Leading the parade, Lido Finance is the top dog in liquid staking, Aave reigns supreme in lending, Uniswap dominates the dex space, WBTC stands tall as the main bridge, and Makerdao is the titan of the CDP realm.
What are your thoughts on the top five defi categories in terms of the total value of these different types of protocols? Share your thoughts and opinions on this topic in the comments below.