An online storefront for decentralized applications, or Dapps, DappRadar research director Pedro Herrera said concerns over banking turmoil in traditional markets and a regulator crackdown on centralized exchanges could lead users to decentralized finance (Defi) apps .
“If you start to see DeFi use cases becoming relevant and giving you more autonomy to essentially manage your own assets and investments, that’s the answer to why. Why DeFi is being used a lot,” Herrera emphasized.
A new report from DappRadar shows that the total value locked in DeFi in the first quarter increased by 37% from $60 billion to $83.3 billion in the fourth quarter of last year.
Part of the increase was due to the ARB airdrop on the Arbitrum layer 2 network last month. The airdrop also marks Arbitrum’s shift toward a decentralized autonomous organization structure, giving holders more input into securing the network, which has come amid a U.S. banking collapse and laws against centralized cryptocurrency exchanges like Coinbase and Binance. After the action became more and more common.
Projects like Arbitrum are “creating a sense of loyalty and cohesion within their community,” Herrera said, which can then “attract developers to build better products,” and ultimately more users to the project.
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According to Coindesk