Crypto Takeover: $481 Million in Ethereum and Bitcoin Locked in Alternative Financial Instruments

August 13, 2019 / by Crypto.IQ

Cryptopreneurs are building a new decentralized finance ecosystem. Based on cryptocurrency, the movement is designed to replace conventional financial instruments, with a better alternative (decentralized) that is not under the control of governments or big corporations.

 According to DeFiPulse.com, cryptocurrencies worth approximately $481 million are currently locked in several decentralized finance protocols and online platforms. An Ethereum-based peer-to-peer lending system, Maker, has contracts worth $280 million in total.

Other Ethereum-powered decentralized lending and borrowing platforms, including Compound and InstaDApp, have about $98 million and $25 million locked in their contracts (respectively). Compound’s CEO Robert Leshner, in a statement about the company’s current growth and development efforts, says, “If or when Compound scales, this will bring about some really interesting improvements in market structure, including fairer prices.”

Decentralized finance is now one of the most active sectors of blockchain. Ethereum blockchain incubator ConsenSys stated that decentralized finance projects “now range in the thousands” and that we are seeing the preliminary stages of “a whole new industry.”

The developing open finance ecosystem also includes digital asset marketplaces, insurance platforms, investment engines, and key infrastructural development.

About $11.8 million in cryptocurrency contracts have been issued via the Ethereum-powered Dharma protocol, which allows customers to lend and borrow e-currencies with “trustless collateralization” in over 50 tokens, which are ERC-20 compliant.

Dharma’s business development manager, Max Bronstein, said that the company envisions a world in which anyone, regardless of location, can take out a line of credit or compound their wealth.

Uniswap, an Ethereum-based token exchange protocol, has approximately $17 million locked into its contracts. The company’s founder, Hayden Adams, has secured investments for the peer-to-peer lending protocol from Paradigm, a venture capital firm based in San Francisco.

On April 23, 2019, Adams explained how he established the company, which is dedicated to creating decentralized finance projects.

He tweeted, “Uniswap began as a side project for me. A way to learn the necessary skills to transition from mechanical engineer to crypto developer. This is what it looked like in November 2017 when it was my first smart contract, first website, and first major coding project.”

Aside from Bitcoin’s Lightning Network, a top decentralized finance protocol and layer-two payments solution for making micropayments, other platforms or protocols that fall within the decentralized economy are Bancor (BNT) and Augur (REP), a decentralized Ethereum-based prediction markets platform.