CoinGecko’s 2021 report noted that DeFi has managed to diversify from Ethereum into other chains at a rapid pace. The NFT market, on the other hand, has seen a meteoric rise thanks to the complementary realms of Metaverse and GameFi.
Drastic Fluctuations In DeFi Ecosystem
According to the latest report by CoinGecko, the market cap across the decentralized finance protocols grew by 7.5x from $20 billion to $150 billion in 2021. Its dominance has more than doubled from 2.8% to an all-time high of 6.5%.
The emergence of DeFi 2.0, enabled by next-generation products that seek to accelerate existing protocol designs, resulted in a thriving final quarter of the year. The report also mentions that increased incentives for new alternative EVM networks, including Cronos, Aurora, and Boba, have further boosted the demand for DeFi tokens on these blockchains.
Towards the end of the year, the crypto market continued to oscillate between fear and extreme fear. This sentiment seeped into the DeFi space as well, which led to the market cap retrace from an all-time high of $174 billion in November.
The DeFi sector has undergone massive changes throughout the year. On the one hand, Ethereum and Binance Smart Chain emerged as winners in the first quarter. The following quarter saw EVM-based networks such as Polygon and Fantom rise to prominence avoiding gas fees and network congestion. In the fourth quarter, non-EVM chains such as Solana and Terra gained ground.
CoinGecko observed that the total TVL for the two blockchain networks grew by 5% and 7%, respectively. Ethereum continues to retain its position as the market leader. But it does not come off as surprising that the blockchain is steadily losing its dominance, thanks to the emergence of viable alternatives.
Additionally, yield aggregators and insurance sectors gained the upper hand while regular bigwigs such as DEXs, oracles and lending platforms suffered losses.
NFT Enters Mainstream Consciousness ‘Big-Time’
Popular marketplace OpenSea has contributed the most to 2021’s NFT trading volume. The ten largest marketplaces collectively recorded almost $24 billion in total trading volume.
OpenSea accounted for a 61% majority, while Axie Infinity contributed 17%, followed by Crypto Punks at 10%. Although non-fungible tokens have been around for a while now, it wasn’t until the “NFT summer” that the trading volume saw significant growth.
Leading the growth for NFT trading activity were Ethereum and Ronin chains. The combined market share stood a whopping 88%. Other layer 1 protocols such as Polygon and Solana quickly caught on the trend and expanded their NFT capabilities.
Meanwhile, CryptoPunks managed to retain its position as the “collection with the highest floor price” at the end of the year, even after being briefly knocked down by Bored Ape Yacht Club (BAYC).
Some of the crucial highlights of the NFT sector was Jack Dorsey’s first-ever tweet, World Wide Web source code, entry of iconic auctions houses – Christie’s and Sotheby’s, endorsements by – Snoop Dogg, Grimes, Post Malone, Big Brands like – Adidas, Nike throwing the hat in the ring, among others.