The increase of the prices of the ether (ETH) is impacting the market of the finance decentralized (DeFi) of Ethereum, since the value that this ecosystem has in reserves amounted to more than USD 1,000 million, reaching a new historic milestone this February 7.The rebound can be seen in the monitoring platform DeFi Press, which reveals that at the beginning of February, 2019, had only USD 276 million in reserves in application DeFi of Ethereum, which means that the new record represents an increase of over 300% in a year. What significance this may have for the market?The bitcoiner Brad Mills published on Twitter their point of view. Create the celebration that was generated around the new historic milestone with the USD 1,000 million of reserves in DeFi is based on a “bold claim”. In this regard, in his tweet, he argues the following:
What percentage of the $ 1,000 million that are “blocked” (not locked, however) in DeFi is: 1) comprised of token-ICO (what is illiquid?). 2) not inflated by ConsenSys or foundations Ethereum / founders Ethereum. This seems to me a manipulation of the market: USD 1,000 million is a bold claim.
What percent of the “$1 billion dollars” that’s “locked up” (not locked though) in DeFi is:1) made up of ICO tokens (illiquid?)
2) not fluffed by consenys or ethereum foundation/ethereum founders.This feels to me like marketcap manipulation – $1 billion is a bold claim. pic.twitter.com/0inz5Ebs3A— Brad Mills ? (@bradmillscan) February 7, 2020
Recall that in march last year, the owners of tokens Maker DAO voted to increase by 4% by the commission of stability of the network, through which are paid contracts smart (CDP) to create DAI, the token is anchored to Maker.Since the adoption of the measure, the users who requested loans with MKR to generate new DAI paid a rate of 7.5% once closed their agreements. These are loans programme, necessary for the creation of tokens, in order to ensure the support of DAI in USD.With the development of the sector of the DeFi arose also a new paradigm and proposed an alternative to the markets of loans, assets and derivatives in the trust world, with the advantages of the protocols are decentralized. Any person with connection to the Internet, now you can get a loan or trade in open markets on the platform Ethereum.In this regard, many projects DeFi require users to leave in reserve a active (ETH, DAI, among others) to participate in the protocol. These assets are “blocked” in warranty, later became a measurement, as seen DeFi Press. This measure was called the total value locked (TVL), translated as total value blocked.To calculate the TVL, the analysts DeFi Press monitor contracts smart underlying each protocol in the chain of blocks of Ethereum. Regularly updated the graphics by taking the total balance of tokens ETH and ERC-20 in power of these contracts is smart. The TVL is calculated by taking these balances multiplied by its price in USD.Although some analysts manifest skepticism, for others the figures are indicating the TVL can be understood as an indication that while more value is on reserve in the ecosystem DeFi, there will also be greater liquidity and potential for the market to grow and become the basis for a new financial landscape.
Do you really these funds are blocked?
The answer may have given the bitcoiner and encoder Udi Wertheimer, who explained the funds DeFi are not blocked at all, are free to move at any time and be dumped on the market (and, in fact, are being dumped all the time). Call “locked” is dishonest / stupid / or both. The term dumping or unfair competition is to sell a product at a price below the normal cost that handles the market, with the objective of competing more effectively.
The difference is that the Parity funds are actually truly locked.“DeFi” funds aren’t locked at all, they are free to move at any point and to be dumped on the market (and indeed they are being dumped on the market all the time). Calling that “locked” is dishonest/stupid/both https://t.co/N5pen8ye6n— Udi Wertheimer (@udiWertheimer) February 7, 2020
In that sense, the application of Compound allows you to make deposits and apply for loans in ETH, 0x (ZRK), dai (DAI), basic attention token (BAT), and augur (REP). The mechanism generates interest for borrowers and liquidity in the market, to the extent that other people participate.Compound works under a system of custody. For example, users made DAI in MakerDAO and then placed on this platform to be guarded and generate profits. All cryptocurrencies are sheltered under a contract smartphone. The loans are requested for the amount of cryptocurrencies that you wish, provided that you maintain a relationship of 1.5 x on the amount to apply and the amount deposited is left in the reserves, but these funds are not blocked.