Since January 4, 2022, the total locked value of decentralized finance (DeFi) has dropped by 21.22%. The total value locked (TVL) in DeFi on January 4 was $255.84 billion, while today’s TVL is around $201.55 billion.
Not only has the digital currency market plummeted in the past two weeks, but the value of decentralized finance has also plummeted, with DEFI’s TVL value dropping $54.29 billion since the first week of January.
Today, DeFi’s TVL is $201.55 billion, down 1.19% in the past 24 hours, and while DeFi’s value has dropped significantly, overall, its share of the crypto economy has more than doubled.
The report says DEFI’s share of the cryptocurrency market has more than doubled from 2.8% to an all-time high of 6.5% since the beginning of 2021.
At the time of writing, the total locked value of DeFi protocol Curve is $20.1 billion, accounting for 9.69%. Curve is active in eight different main chains, and the TVL is about $19.53 billion. The indicator shows that Curve’s TVL has been in the past seven days. A drop of 16.34%. In terms of total locked value, Curve is followed by Makerdao, Aave and WBTC.
The current TVL of DeFi is $201 billion, and the value of Ethereum is $119.04 billion. Ethereum’s TVL accounted for 59.06% of the total TVL of all DeFi protocols on Sunday morning (EST).
Terra’s blockchain is valued at $16.94 billion, followed by the Binance Smart Chain at $12.22 billion. In terms of TVL held by specific blockchains, Fantom is currently in fourth place with $12.06 billion.
Avalanche is fifth with $8.62 billion in TVL and Solana is sixth with $8.12 billion.
Most digital currencies have been bloodbathed in the past week, but Fantom’s TVL rose 59.61% in seven days and Heco’s TVL rose 52.77% in seven days.
What is DeFi?
The first entry among the top DeFi interview questions would obviously point towards its definition. Decentralized finance is actually a financial ecosystem developed over the Ethereum blockchain network with various protocols and platforms. DeFi helps in easily moving around cryptocurrency tokens. At the same time, it also helps in trading, lending, and borrowing cryptocurrency tokens.
What does the future of DeFi look like?
As of now, there is no specific answer to this question, but the future looks bright for DeFi as it is slowly becoming mainstream. Technological advancement in the underlying infrastructure for DeFi is faster than ever with new innovative ideas popping up daily. 2021 looks like a great year for DeFi seeing the recent developments.
Is DeFi legal?
Yes, almost all DeFi projects or protocols need to abide by financial regulatory measures licenses to function regardless of whether they’re centralized or decentralized. Thanks to DeFi, financial watchdogs (e.g., the SEC) have started to notice the crypto space more than ever.
Is DeFi safe?
Yes, almost every protocol undergoes smart contract audits to ensure the codebase is secure and free from bugs and vulnerabilities. Majority of the popular protocols adopt strict security measures to ensure your crypto assets remain safe. Still, it’s advisable to conduct your due research before investing in any project.
Do I need some kind of cryptocurrency to participate in DeFi?
Yes, you would need cryptocurrency to participate in DeFi. Since Ethereum is the platform of choice, most DeFi projects’ tokens are based on the ERC-20 standard. Hence, it would be better for you to hold some ether for the sake of ease.
Do I need a crypto wallet for DeFi?
Yes, a digital wallet is a prerequisite for you to be able to dabble in the field of DeFi. There are several wallet options available for interacting with DeFi applications — MetaMask, WalletConnect, TrustWallet and Argent being the popular ones.
What are the important benefits of DeFi?
The primary objective of DeFi focuses on resolving the issues evident in traditional finance. Traditional finance depends on intermediaries such as banks. However, DeFi applications rely on code for specifying the resolution of any potential dispute. Subsequently, users have the ability to maintain comprehensive control over their funds. This can help in reducing costs related to use of financial services products to ensure a frictionless financial system.
The deployment of DeFi on blockchain takes away any specific point of failure, and data can be spread easily across various nodes. So, each node has copies of transactions carried out on the network. Therefore, it is difficult to impose censorship and a possible shutdown of service. The most significant benefit of DeFi points out to the improved accessibility of financial services for a broader audience.
How do DeFi applications work?
Another top mention among DeFi questions to ask in an interview definitely points out that it’s working. DeFi works through the development of dApps on a blockchain network like Ethereum and using smart contracts for automation. By using the two facets, DeFi applications could easily accommodate various financial services on a specific network. Presently, there are many notable examples of dApps tailored for lending automated loans known as crypto loans. Many apps related to DeFi also include the creation of stablecoins, investment options, asset exchange, and others available presently.