DeFi total value locked passes $9 billion during the summer boom
Total value locked in DeFi protocols surpasses $9 billion, with WBTC being a significant contributor to growth.
On August 31, 2020, DeFi total value locked passes $9 billion during the summer boom. Total value locked in DeFi protocols surpasses $9 billion, with WBTC being a significant contributor to growth.
The milestone demonstrated that despite Bitcoin maximalist criticisms, substantial numbers of Bitcoin holders were willing to wrap their BTC and move it to Ethereum to access DeFi opportunities that weren't available on Bitcoin's base layer. The $9 billion TVL reflected the power of yield farming incentives and governance token distributions that had characterized DeFi Summer.
Protocols like Compound, Aave, Yearn Finance, and Uniswap offered extraordinarily high yields—sometimes exceeding 100% annual percentage rates—to users who provided liquidity or participated in lending and borrowing. These yields, often paid in governance tokens that could themselves be traded or staked for additional returns, created self-reinforcing cycles where high yields attracted capital, which increased protocol usage and token prices, which attracted more capital.