The total value of assets secured in the Cardano (ADA) network, also known as total value locked (TVL) has increased rapidly. The rise of decentralized finance (DeFi) has also not bypassed the Cardano network. Since the beginning of this year, Cardano’s TVL has risen more than 200 percent.
Cardano DeFi is growing fast
As of January 1, the total value of assets in the Cardano network was approximately $50 million. That amount has now risen to more than $120 million. This turns out from dates of analysis platform DefiLlama.
This impressive growth is linked to the strong growth of the DeFi sector in general. After a grim crypto winter, investors are slowly starting to get interested in the services of DeFi platforms again.
Staking and yield farming in particular are big drivers for the current rise in DeFi. In addition, the trading volume on decentralized exchanges (DEXs) is also increased considerably. Trading volume in the DeFi sector increased from $49 billion in January to $94 billion in March.
However, the total trading volume of DEXs on the Cardano network is not much compared to larger blockchains such as Ethereum (ETH). Ethereum is responsible for that 67 billion dollars of DeFi trading volume. Arbitrum (ARB) has a DeFi trading volume of approx 9 billion dollars.
Despite Cardano’s low share in the total DeFi sector, the strong growth of its DeFi ecosystem is still striking. If the crypto market holds up, this growth will most likely continue.
Less trust in centralized exchanges
The growth of the DeFi sector has gained momentum after last November’s FTX fiasco. Investors seem to have a lot less confidence in centralized exchanges after FTX collapsed.
The disadvantage of DeFi is that it is a lot less accessible for the average crypto user, and especially for newbies in crypto land. In addition, DeFi projects still appear to be very vulnerable to hacks and exploits.