As the crypto industry has grown and evolved, one sector that continues the pique the interest of investors globally is the decentralized finance (DeFi) market. This is best highlighted by the fact that even though a severe bear market has gripped the digital asset industry over the last eight odd months, the total value locked (TVL) within the DeFi landscape has risen from approx $16B to around $60B since Q1 2021, thereby representing a growth of over 350%.
Furthermore, despite the pervading weak macroeconomic conditions, numerous research studies claim that the DeFi market is set to reach a combined valuation of $507.92 Billion by 2028, growing at a CAGR of 44%. This is largely because DeFi platforms help eliminate the need for financial intermediaries and middlemen — including banks, brokers, etc. — thus allowing users to access a high level of transparency and monetary autonomy.
One network that has helped drive this growth is Klatyn, an enterprise-ready blockchain that offers extremely high throughput rates (of approx. 4,000 TPS), low latency, near-instant finality, and customizable Service Chains. The ecosystem has been adopted by many noteworthy entities, including the Bank of Korea alongside several South Korean gaming companies.
From the outside looking in, Klaytn is designed to help resolve several bottlenecks/critical barriers affecting a whole host of Web3 and metaverse projects today, including low throughput, high peripheral gas costs, and poorly designed user interfaces. Thanks to its multifaceted blockchain infrastructure, Klaytn delivers clients with end-to-end integration, including a built-in layer-2 solution.
Due to its novel design, the blockchain can integrate several side-chains associated with domains, such as the metaverse, Web3, DeFi, gaming, etc., without compromising on its core fundamentals of speed, scalability, and cost-effectiveness. Furthermore, Klaytn offers immediate transaction settlements, with a block time of just 1 second while harnessing the power of over 50 consensus nodes participating in its validation process.
Numbers-wise, a report released recently by crypto intelligence firm Messari suggests that Klaytn’s network activity surged dramatically between Q4’21 to the end of Q1’22, with the project’s active user base spiking exponentially in comparison to other blockchains. During this time, Klaytn’s total value locked rose as high as $4.75B, ushering its native cryptocurrency (KLAY) into the top 40 digital assets by market capitalization.
According to DeFi Llama, the Klaytn network currently houses $360M across its various associated DeFi protocols, ranking it 14th among all chains. This decrease in funds can, in large, part be attributed to the macroeconomic conditions pervading the global economy as well as the downfall of several crypto projects, including Terra, Celsius, Babel Finance, Vauld, etc, over the last few months. Despite the bearish market conditions, the volume of KLAY locked within the DeFi ecosystem has increased by 73% year-to-date (YTD), thereby showcasing the project’s impressive growth and resiliency.
Thanks to its unique digital framework, the project currently houses several unique projects that have helped its utility grow even further. Klap (Klaytn Lending Application) is one such offering. It is a decentralized non-custodial liquidity market protocol designed atop the Klaytn blockchain.
It allows users to deposit and borrow funds seamlessly, with depositors providing liquidity to the market to earn passive income. At the same time, borrowers can acquire loans in an over-collateralized (perpetually) or under-collateralized (one-block liquidity) fashion. As per the aforementioned Messari report:
“Klap is Klaytn’s leading overcollateralized lending protocol, with around $18 million TVL not including the $18 million amount of borrows. Klap originated as an Aave fork, but it also blends together many other protocols like Solidly (veNFTs), Platypus (yield boosters), Curve (voting escrow governance), and Geist (penalties for mercenary capital).”
Klap recently launched its native token designed to facilitate a wide range of use cases within the protocol’s growing ecosystem. Since its market inception — earlier in May — the platform’s total value locked (TVL) has surpassed the $100M mark, making Klap the second most popular dApp within the Klaytn ecosystem. Furthermore, the project has raised $4M in a pre-seed round in June led by many mainstream entities, including Quantstamp, Ascentive Assets, ROK Capital, Manifold, Krust, and Novis.
Lastly, by harnessing the power of Klaytn’s technical architecture enabling high TPS, fast finality, and cheap transactions, Klap seems primed to help serve the fast-expanding DeFi market, allowing it to scale for mass retail adoption.
Thanks to its use of an IBFT-based consensus mechanism, multi-channel propagation, and customizable Service Chains, the Klaytn network seems to have enjoyed widespread adoption among many mainstream enterprises. That said, in recent months, the project is beginning to target retail participants, primarily within the blockchain gaming sector. Lastly, the Klaytn Governance Council now has 35 members, most of whom are integrating/building their crypto products on the Klaytn Mainnet or one of its Service Chains. Therefore, as we head into an increasingly decentralized future, it will be interesting to see how things pan out for the project.