DeFi Frenzy Drives Combined Market Cap of ERC-20 Tokens to Surpass ETH
The overall valuation of tokens built on top of Ethereum blockchain, especially the most popular ERC-20 tokens, has surpassed the value of ETH itself.
The primary catalyst behind this phenomenon is being attributed to the recent surge in popularity of defi tokens, which are mostly ERC-20 based. The total market cap of ERC-20 based tokens has surpassed $33 billion. The data has been derived from Ether Scan’s block explorer.
Camila Russo, Chiefess at DefiantNews also tweeted about the same and wrote:
“Looks like total ERC20 tokens market cap has surpassed ETH market cap?
ERC20 tokens on Etherscan https://etherscan.io/tokens
Market cap = $33B
ETH market cap= $27B
I think there was a @coinmetrics chart tracking this?”
Ethereum’s total market cap is currently valued at $27 billion, almost $6 billion less than ERC-20 tokens, and looking at the growing popularity of defi and an increasing number of successful ERC-20 tokens the gap is going to get only wider unless the alt season arrives. The valuation is only for ERC-20 tokens while there are several other popular tokenization protocols such as ERC-721 used in CryptoKitties, which has not been even considered.
This is the first of its kind that occurred when the value of the products built on a particular platform exceeded the value of the underlying platform. Of all the infrastructures running on top of Ethereum, decentralized finance is currently the most valuable, and as per some reports, it is growing faster than any other crypto segment. This is evident from the fact that the amount of assets locked in Defi smart contracts has exceeded $1 billion and nearing $2 billion marks all in a matter of a couple of months.
Ethereum token’s price might not have seen any push due to the rising popularity of defi, but it is also a sign of market maturity. And with Ethereum 2.0 set for a release, the Ethereum ecosystem might see another surge in interest, and hopefully, this would also help in pushing its market value.