DeFi Begins to Move From a Sub-niche Market to Mainstream Finance

With the increasing level of activity in the market sector, the next logical progression appears to be focused on making DeFi solutions more mainstream.

Apart from handling price instability, a larger DeFi market could mean greater regulatory scrutiny and more significant competition with legacy finance systems.

DeFi market growth crosses $1 billion milestoneAs previously reported by Cointelegraph, the total ETH value locked in the DeFi market has crossed the $1-billion mark.

In an email to Cointelegraph, a spokesperson for the Maker Foundation highlighted the growth rate of the DeFi market, stating that the pace is exciting, adding: "I believe it speaks to the shared human desire to have more control over critical elements of our lives, like our financial futures and opportunities." Akiva Lai, chief product officer at blockchain governance and auditing platform Maxonrow, highlighted the significant growth in the DeFi market for Cointelegraph.

According to Lai:."It's pretty astounding, to be honest. $1 billion in locked DeFi value may seem minuscule compared to legacy finance, but we need to examine it for what it could be - not what it currently is. Paired with the ballooning growth of exchange products, from derivatives to staking services, and it's only natural that more users will tap DeFi products in the never-ending search for yield amid an uncertain economic backdrop of negative interest rates and slow growth."

According to Defipulse data, lending DApps command the largest share of the DeFi market, and MarketWatch forecasts that the lending market will reach a valuation of $8 trillion within the next two years.

Lending holds the lion shareIndeed, MakerDAO's DAI stablecoin accounts for more than 60% of the DeFi market.

DeFi moving toward mainstream adoptionThe question for DeFi as it moves toward mainstream adoption is whether the emerging market will seek to dislodge legacy systems or run concurrent perhaps maybe even collaboratively with mainstream finance.

A mature DeFi market brings with it the possibility of more flexible options for retail investors with some products likely possessing useful trade-offs in comparison to legacy systems.

The growth in the DeFi market marked one of the main developments in the crypto market for 2019.