Amid DeFi Boom Ethereum Could Hit $1 Trillion Annual Transaction Volume

October 23, 2020 3:32 PM UTC

The growing trend of decentralized finance (DeFi) protocols has enabled Ethereum, the second leading cryptocurrency, to surpass Bitcoin in terms of daily transaction volume. As of now, the rolling 30 day average for the volume of Ethereum transactions is $7 billion USD. Whereas, Bitcoin is standing at $3 billion USD, based on the analysis provided by Messari, a crypto data aggregator firm.

According to a prediction by Messari, if Ethereum continues to present the same pattern of growth it will become the first public blockchain to hit the $1 trillion USD threshold in annual transaction volume.

Over the last three months, Bitcoin’s price has rallied to $13,000 USD from $9,500 USD. Despite the significant price surge, Bitcoin’s volume has remained almost constant since 2019, this shows that investor consideration has moved toward Ethereum based decentralized finance protocols.

DeFi Craze Keeps Growing Bigger 

Decentralized finance (DeFi) platforms have surged abruptly as popular new crypto platforms. DeFi platforms are open-source protocols developed on top of the blockchain, primarily on the Ethereum chain. It empowers users to control their assets without employing the services of traditional financial sectors. 

Based on the report from Messari, extensive utilization of stablecoins on the DeFi platforms has played a significant role in the growth of Ethereum’s massive transaction volume.

As reported earlier, the recent meteoric growth of DeFi has resulted in the locking of over $4 billion USD worth of Bitcoin and Ethereum. According to data from DeFi Pulse, the amount of ETH locked in the DeFi sphere has increased by more than 215% and has reached as high as 8.6 million compared to just 2.7 million from June 2020. The amount of Bitcoin locked in DeFi has also gone up to 158,800 from a humble 5000 BTC, a growth of almost 3000%, since June 2020.

However, Messari predicts “the next twelve months are a real defining point in the platform wars” within the crypto space.

“Look for all would-be ETH Killers to continue to empty out their treasuries to build a parallel DeFi sector throughout the end of 2020 and beyond.”

The founder and CEO of Messari, Ryan Watkins, highlighted that decentralized exchanges (DEXs) such as Uniswap, Curve, and Balancer have marked a massive on-chain liquidity rush in recent months. The trading volume on such DEXs has risen over $22 billion USD, which is 70x higher when compared to last year.

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