DeFi has gotten the attention of the crypto world.
The total dollars invested in these platforms just crossed $2 billion. This is a lot of money for a relatively new service. If this continues, we could see a massive amount of money distributed.
At this point in time, according to a Messari analyst, DeFi platforms are pushing out $25 million a month. It is showing the potential of "yield farming".
Here is a list of the largest platforms.
The liquidity that is being provided is helping to kick off a network effect. Essentially, the users are getting "pseudo-equity" in a growing development.
Ultimately, the goal is that when users start to withdraw their funds, the platforms can stand on their own.
“After a while, the liquidity pool reaches a critical mass to where it can function on its own, so in the case of COMP, four years of liquidity mining should be long enough to when it eventually runs out. It’s a massive lending pool where users want to leave their capital because of its size and network effects rather than the COMP rewards” Purdy explained to Decrypt.
Source
Ethereum is enjoying the robust growth that is taking place. Most of the DeFi apps are on that blockchain.
While this is still very immature, the platform has the potential to eventually rival traditional finance. The numbers amount to very little yet exponential growth tends to close things very quickly. We see a great deal of progress in the first half of 2020 alone.
This is not much different than any other exponential growth in the online world. The farming is luring in a ton of people all looking for returns on their cryptocurrency. One of the biggest advantages to the growth rate is the fact that more crypto is issued each day. This means that millions of people are seeing their "bags" grow. This provides more ammunition which can be used for DeFi.
When the numbers look small, it is best to look at the increase to see where things are going. After the mining was liquidity mining was introduced, both Compound and Balancer saw an increase of 500%.
It does not take many increases of that size before the numbers get really large.
Thus, we can expect that $25 million distributed per month to increase significantly.
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