Data shows: The total value locked in DeFi is overestimated by $2.83 billion

Editor's Note: This article comes fromCointelegraph Chinese (ID: CointelegraphChina), Author: ANTÓNIO MADEIRA, reprinted with authorization by Odaily.

Editor's Note: This article comes from

Cointelegraph Chinese (ID: CointelegraphChina)

Cointelegraph Chinese (ID: CointelegraphChina)

, Author: ANTÓNIO MADEIRA, reprinted with authorization by Odaily.

The total dollar value locked in decentralized finance (DeFi) protocols recently surpassed $6 billion, according to DeFi Pulse data.

However, new research by Encode Club founder Damir Bandalo finds that number is a little too high. Compared to $6.32 billion, Bandolo said $3.5 billion is a better estimate of the actual value locked in the top 15 DeFi protocols.

While the numbers shown by various DeFi data sources may be a bit high, as one Twitter user pointed out, this happens in traditional finance as well.

The total value locked in a DeFi protocol can be difficult to calculate, as a dollar locked can create its value multiple times. For example, users can lock ETH (in MakerDAO) to create DAI (a decentralized dollar-based stablecoin).

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DeFi is not limited to market applications

Only about 3.85% of ETH and 0.18% of Bitcoin (BTC) are locked in DeFi, which means there is still plenty of room for growth. Wrapped Bitcoin (wBTC) is the most popular form of tokenized Bitcoin on the Ethereum blockchain, with approximately 50% of its $274 million market cap locked in Compound. RenBTC, the decentralized version of wBTC, has also started to act as a gateway to DeFi.

ETH remains the most popular cryptocurrency in the DeFi ecosystem, accounting for 50% of the value locked, while BTC accounts for only 10%. Stablecoins account for 33% of the total value locked, with the rest made up of other ERC-20 tokens such as Basic Attention Token (BAT), Augur (REP) and others.