Expert doubts the estimates of funds locked in DeFi

The amount of funds locked in the 15 leading DeFi protocols stands at $3.5 billion, compared with more than $6 billion reported by DeFi Pulse. This conclusion was reached by Damir Bandalo, founder of the Encode Club blockchain community.

A lot of talk these days around the total value locked in DeFI.

However all of them count the same $ many times.

So I did my own calc to find out how much is actually locked in top 15 DeFi protocols.

Answer: $3.5bil. (compared to $6.7bil on @defipulse)

cc @devops199fan

1/n

— Damir Bandalo (@damirbandalo) August 16, 2020

The analyst noted that due to the composability inherent in the DeFi space, each dollar can be counted several times.

“Suppose you deposit ETH into MakerDAO and issue DAI. You take that DAI, move it to Curve and place it in yCurve. Your dollars can actually be counted five times,” he emphasised.

Bandalo arrived at his estimate of funds locked in the protocols by excluding double counting of tokens.

Volume of funds locked in DeFi protocols according to DeFi Pulse.

In the course of his analysis, the analyst calculated that 3.85% of the total ETH supply is locked in DeFi protocols, while for Bitcoin this figure is only 0.18%. Of the total funds, 33% are stablecoins, 50% ETH and 10% BTC.

Update: Later, his arguments were rebutted by DeFi Pulse founder Scott Lewis. He emphasised that the service counts every dollar only once.

error 2: DAI is a new asset. If you think DAI isn’t a new asset, you’d also have to strike basically every othe world currency who value is backed by a reserve of dollars and gold.

error 3: DAI locked in curve, then locked in yean is NOT double counted.https://t.co/y5StOVWYDu

— scott lewis🌾 (@scott_lew_is) August 16, 2020

Earlier, 32% of Blockfolio app users monitoring crypto positions admitted that do not understand the basics of DeFi.

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