The Decentralized Finance (DeFi) market has seen a significant boost of $10 billion, fueled by Ethereum's ongoing rally that has sent its value soaring to $1,900. The surge in Ethereum's value has notably increased the market valuation of DeFi tokens within its ecosystem, leading to a rise in trading activity on decentralized exchanges such as SushiSwap and Uniswap
SushiSwap experienced significant growth this week, with its value increasing by 58.55%. This uptick is indicative of the broader trend within the Ethereum ecosystem, as investors continue to show interest in riskier small-cap projects beyond the top 10 crypto market rankings
The transition from Proof-of-Work to Proof-of-Stake in the Ethereum blockchain has played a crucial role in this development. This transition has mitigated potential increases in Gas fees that could have been triggered by Ethereum's value growth. Layer 2 (L2) scaling protocols such as Optimism and Arbitrum have further improved the situation by alleviating network congestion on the Ethereum blockchain.
Emerging DeFi tokens like Raydium, Opulous, and Venus on the Ethereum Layer-1 blockchain have also contributed to the increase in the total DeFi market capitalization. As Ethereum continues its upward trajectory, experts predict further capital inflows into these DeFi tokens and the broader ecosystem.
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