With its increase in popularity, the DeFi space has welcomed a range of newcomers. This is the reason, websites like DeFi Pulse are so highly valued. This website can be considered as the CoinMarketCap of DeFi projects. In this article, we will see what this website is, and how it operates.
What Is DeFi Pulse?
It is a website that deals with various DeFi projects. The moment you enter their website, you will see their home screen. The screen has the following elements.
- First up, we have the all-important TVL or “Total value locked” metric. This mainly shows how much money the investors have locked up in varied DeFi contracts. Certainly, the higher the money locked up, the more thriving the economy. If the quantity of TVL is on the greater side, it tends to have a positive effect on the price of Ethereum.
- On the sidebar, you can see an easy and simple graph that shows you the regular progression of TVL. According to the graph, the TLV jumped from $1.11 billion on 16th June to $1.83 on 1st July. That is a staggering 64.86 percent raise in just two weeks.
- Below the value locked up square, you get the market leader share metric. At the time of writing this, Maker is the market leader and has 21.05 percent of the market.
- Right at the bottom, you will see the varied DeFi categories available on their website, primarily – DEX (Decentralized Exchange), Lending, Derivatives, Payments, and Assets.
- You also see the banner for “DeFi Pulse Farmer,” which is their newsletter.
What Is DeFi Pulse Index?
DeFi Pulse Index is the primary of its kind, an index of DeFi (decentralized finance) that is not synthetic or a derivative but rather in this case you own the tokens that consist of the capitalization weighted index. Constructed on Set Protocol’s latest v2 infrastructure, DeFi Pulse Index tokens are directly redeemable for its Decentralized Finance tokens. Much like our TVL (Total Value Locked) metrics, DeFi Pulse Index is a standard that the community can stand behind. Total Value Locked was formed to help the community interpret the value locked within the ecosystem of DeFi. They see DeFi Pulse Index as a natural process of what they have to provide to the wider community. The DeFi Pulse index price is $161.55 USD.
What is DeFi Pulse Income?
One of the basic factors behind the immense fame of DeFi is the chance to make passive income. The website offers a handy little calculator that illustrates how much monthly interest you can receive by locking up certain units of a certain asset. So, according to the calculator, you can make up to $62.24/month if you lock up 10,000 DAI.
Now if you scroll down, Pulse also calculates how much the selected token, in this case, 10,000 DAI, will offer you in dYdX, Compound, and Maker.
DeFi Pulse Feature: Yield Farming
As per a blog post that has been written by the DeFi Pulse team, yield farming may end up changing the defining characteristic of this arena in 2022. In yield farming, you are taking the advantage of DeFi’s fantastic variety and investing in numerous protocols at the same time to receive a return on your investments. The blog stated that some investors had received 100% APY via a combination of token and interest incentives.
Yield farming has already created a tremendous impact on the DeFi area:
- Yield farming elevated TVL on DeFi to conveniently zoom past the $2 billion level. Not only does this raise mainstream exposure of Decentralized Finance, but it has a positive impact on the price of Ethereum as well.
- It has profoundly affected projects like Curve, MCDEX, Balancer, Uniswap V2, and Compound.
Yield farming took over after the governance token of Compound, COMP, went live. It then promptly overtook Maker in the leader’s board and got over $600 million locked up in its contract. After a few days, Balancer, another project, took advantage of yield farming to experience tremendous development as well.
Is The Yield Farming Hype Similar To The 2017 ICO Hype?
Many people are comparing the present yield frenzy to the Initial Coin Offering (ICO) hype of 2017, wherein millions of dollars were invested in projects that were useless, ultimately leading to the bear market the next year. However, such contrast is a little unfair.
Back in 2017, investors were blindly investing their money on varied projects, hoping to chance upon the “next bitcoin.” The difference presently is that people are investing money in things that actually have a working product. However, it would be foolish to say that nothing wrong can happen to this space. Anything that increases, will inevitably have to decrease. However, this yield farming hype may bring a whole new batch of users into the arena. Along with that, it will definitely affect the price of Ethereum positively as well.
It goes without stating that the good folks over at Concourse have formed a highly useful and interactive channel for both expert and novice DeFi users. While there are other similar projects in the space, DeFi Pulse is quite evidently the market leader.