Decentralized finance applications are popping off Tuesday, and the ETH price spike isn't the whole story.
Bitcoin SV is the fourth-biggest cryptocurrency by market capitalization, according to CoinMarketCap.
Since ETH gets "Locked in" to DeFi apps, the total market value will go up any time the value in ETH increases, but that's only part of the picture.
DeFi Pulse showed the DeFi market as having roughly $706 million in ETH locked into its applications on Monday.
Another part of the story is speculators looking to capitalize on a market spike.
Leshner said that it's very likely that money is moving into DeFi because traders are looking for liquidity in order to play the market.
Which provides an easy way for ETH holders to borrow, saw a surge in usage Tuesday with collateral rising about 10 percent, according to DeFi Pulse.
Volume on Uniswap, the decentralized token swapping dapp, is up almost 100 percent over the day before, according to Uniswap Info.MakerDAO has also seen a large jump, nearing $50 million, likely because traders are locking up ETH to create DAI they can trade with.
The first step in that process is to turn to DeFi applications to provide liquidity, for example, by borrowing against an asset whose value is rising.
"The ~$600 million 'locked' in DeFi protocols is all funny money. It's not enough for global finance to care. But it's a huge bounty to break the smart contracts behind it. And if we're going to break them, better do it at the toy stage," Monegro said, comparing it to the era when spending money on the web still felt dicey.
Traders Turn to DeFi to Capitalize on Tuesday's Crypto Market Spike
Published on Jan 14, 2020
by Coindesk | Published on Coinage
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