The amount of capital investment into decentralized finance (DeFi) projects has accelerated very rapidly during the course of the latter part of 2021, and now as the year draws to a close, it is clearer than ever that DeFi is gaining massive momentum.
The current market capitalization of DeFi stands at $138.89 billion, which demonstrates that an increasing number of developers and investors are taking a very optimistic view of the future of DeFi as a method of powering the mainstream financial services ecosystem.
Given that many DeFi projects are based on the Ethereum blockchain and utilize Ethereum’s highly valuable underlying technology. Ethereum’s faster transaction speeds, lower fees and versatility in running DeFi applications and hosting NFTs are some of the reasons for increasing levels of investment.
This means that nowadays, DeFi is investible in itself. No longer is Ethereum just a mere store of value or a cryptocurrency; instead Ethereum is now being viewed as a cryptocurrency and store of value as well as a technological basis for powering the entire fiscal world of the future.
Therefore, in November 2021 alone, Ethereum values rose by 60% compared to the start of the fourth quarter of this year and, congruently with the investment in DeFi projects, Ethereum’s own market capitalization is now up by 6.4% today too $480.48 billion.
Clearly, Ethereum’s continually appreciating value is directly correlated to its DeFi possibilities, which include Smart Contract capabilities for lending, or to automate the execution of an agreement so that all participants can be immediately certain of the outcome, without any intermediary’s involvement or time loss.
The recent switch to blockchain-based trade execution by HSBC and Wells Fargo also shows that the bypassing of intermediaries in the institutional investment banking world is now very much on the table. In that circumstance, CLS Bank, which settles trades as an intermediary and is recommended by various global central banks, is now fully bypassed and trades are settled on a decentralized basis.
Native tokens are often based on Ethereum ERC-20 technology, as is the case with CoinMetro’s native token XCM which is currently live and which customers can participate in staking to earn a passive income whilst taking their part in developing the decentralized financial landscape of the future.
Over the past few months, some senior analysts at major data firms and investment banks have begun to consider it a possibility that Ethereum will rise tremendously in value over the next few months. If this does happen, it will be for different reasons to the rise to fortune that Bitcoin has experienced this year.
Bitcoin is viewed universally as a decentralized store of value and an asset, whereas Ethereum is partly an asset and partly a technological topography upon which the way we all live our daily lives in future could be built.
The increasing market capitalization of both Ether and DeFi projects shows that investment is pouring in. We now live in times when the community builds the financial future, which is exciting and empowering to say the least.
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