Image Source: Unsplash

It’s heartening to see Maker DAO, the original decentralized stablecoin project, return to the top spot in terms of total value locked (TVL) this week. According to data from Defi Llama, Maker DAO - the home of US dollar-pegged stablecoin DAI - is posting a TVL of nearly $10 billion as of Wednesday. While 30% down from where it was last month, this marks a grand achievement for one of DeFi's oldest projects and a heartening signal for the entire industry. 

DAI, the overcollateralized, semi-algorithmic stablecoin, is arguably the progenitor of the entire decentralized finance project: the foundation on which all of DeFi has been built. It stood the test of time during the bear market of 2018 and then the tremendous crash of March 2020, which prompted Maker DAO to redesign its entire governance model, again setting a precedent for the whole industry. 

Throughout the tumult of the past two weeks, during which around half of DeFi’s total market capitalization has been wiped out thanks to the demise of UST, Maker DAO has ticked along soundly - reportedly processing 264 liquidations over the past 30 days with no problems. Curve finance, the second-largest DeFi protocol by TVL, has seen its value more than half since April from around $20 billion to just over $9 billion today.

Another of DeFi's founding projects, Curve is the original yield platform; however, unlike Maker DAO, it was unable to escape the contagion of the UST fallout due to the vast amounts of the asset that ran through its system. Nonetheless, it remains a powerful force and a stalwart in the industry. Number three in terms of TVL is Aave: the lending and borrowing platform that, again, was the architect of the second phase of DeFi’s development in 2020. 

These top-three DeFi survivors really do represent the cream of the crop, providing a snapshot of the industry’s evolution from its earliest days in 2014 to today. It also shows how important solid development, track record, and reputation are in this industry. These projects were developed during the bear markets of 2018. Unfettered by the urgency that often besets projects launched in a bull market, they were able to fully form and really hone their products and services. 

That Maker DAO, Curve, and Aave have returned to prominence as so many of the quick-buck, trend-driven projects have fallen away in this latest market cull is as it should be. It is also an exciting glimpse into the exciting period of development that we are about to witness over the coming months and years. Come 2024, we’ll no doubt be talking about the next trio of stalwarts that have survived tomorrow’s big crash, all of whom made their bones in the bear market of 2022. 

While it is, of course, terrible that so many investors have lost so much money over the past few weeks, for many this is truly an exciting time for the industry. It marks the next stage of its development that will see serious projects and extremely talented developers bring about the next big thing in Blockchain.