The Decentralized Finance (DeFi) yield farming frenzy has been one of the hottest trends in the crypto space during 2020. The total value locked in DeFi platforms, which is a measure of how much money is invested into DeFi platforms at any given time, has skyrocketed from $0.54 billion in the middle of March to $4.48 billion currently, a staggering increase of 730%.
Literally, the amount of money that is being held on DeFi platforms for lending, borrowing, and trading has surged by more than 7X.
Notably, it seems this trend is only accelerating. In June the total value locked increased from $1.04 billion to $1.88 billion, and in July it increased to $4 billion. Already in the first week of August another $0.48 billion has been transferred into DeFi platforms.
Therefore, it is clear that the yield farming frenzy is still in its growth stage, and it is likely that billions of dollars of additional crypto will be invested per month into DeFi platforms.
Zooming out, the DeFi yield farming frenzy has likely played a pivotal role in the recent crypto market rally, since the billions of dollars of crypto that is being purchased for DeFi investments is creating major buying pressure. Indeed, this is why Ethereum (ETH) has seen the strongest rally in recent months relative to other major cryptocurrencies.
It is quite possible that the crypto market will continue to rally due to DeFi buying pressure, especially considering that Bitcoin (BTC) selling pressure has significantly decreased due to the May block halving.
On a final note, Compound briefly became the #1 DeFi platform earlier this year, since Compound started the yield farming frenzy with the launch of their native token. However, MakerDAO is now back on top with $1.3 billion total value locked, which is far more than the $0.79 billion total value locked in Compound. Also, other DeFi platforms including Synthetix, Aave, and InstaDApp have seen major growth.