April 2019 was the last time DeFi’s ‘value locked in Ethereum’ hit all-time highs. This month, the space has blown past the previous 2.3 million Eth record by an extra 300,000.

Still, ‘value locked in USD’ is about $20 million lower than the previous high in June 2019, when Ethereum’s USD value was almost double what it is today.

What’s been happening in DeFi?

Value locked in DeFi has been steadily increasing since 2017. Looking at the chart alone can spark interest because of how DeFi’s appeal seems to transcend the volatility we’re used to seeing in crypto assets. On DeFi Pulse, the value locked in Ethereum chart looks more like Apple stock than Bitcoin or Ethereum’s price charts.

That being said, it’s not too surprising that the DeFi space is continuously being utilized. Out of millions of use-cases crypto entrepreneurs come up with, DeFi projects produce tangible results. Right now, one can easily lock DAI into a lending protocol, receive 5% APR and pull it out whenever they want to.

On top of that, decentralized exchanges are getting more and more features, such as margin, stop losses and limit orders. Some DEXs are one stop shops for lending, borrowing and margin trading. Liquidity is still lacking which is bound to keep big players at a distance, but the space is clearly improving little by little.

Okay, but why is DeFi hitting all-time highs right now?

MakerDAO’s DAI stablecoin is the token that makes DeFi go round. Instead of being backed by dollars, it uses algorithms and a system of incentives to keep the price pegged around $1.

Originally, DAI was only able to be backed by Ethereum, but on November 18th, Maker released an iteration that could be backed by any ERC-20 token.

The release was exciting and all, but what it really did was get Eth moving around in the Ethereum ecosystem. Maker is forcing all SAI holders (people who still use the Ethereum only DAI) to manually convert their holdings to the new version. With this, others created protocols to make the process easier.

Excitement over the most popular protocol making a new iteration of their product creates press for DeFi, encouraging new Eth to be locked, forces people to move Eth around, requires protocols interacting with DAI to introduce new features and increases potential for casual DeFi observers to see how the space has been changing and potentially test out new features.

There’s one exchange called Synthetix that has shown remarkable growth without huge releases. More recent growth in Synthetix seems to spike around the same time as the DAI release, but it doesn’t use DAI at all.

Eth locked in DeFi by the numbers

The largest Eth-locker in DeFi, SAI hit an all-time high of 100 million tokens outstanding and has dropped to 86 million since the new version of DAI has released. The new DAI is at 18 million tokens outstanding, 14 million of which were converted from the old version. This means that within a few weeks, 4 million DAI tokens were created.

According to DeFi pulse, when DAI was released on November 18th, 2.47 million Eth was locked in DeFi. Currently there are 2.62 million Eth locked. 4 million dai would only be equivalent to about 26,000 Eth, which only accounts for a minority of the growth.

Another protocol that has been rapidly locking Eth is InstaDApp, which since the release of DAI has locked 60,000 Eth. Their growth undoubtedly has to do with DAI because they recently released a “partial debt migration” system which DeFi pulse noted, was a hit.

I think it's safe to say that @InstaDApp's partial debt migrations are a hit among SAI borrowers in #DeFi. pic.twitter.com/OmuP9ZootE — DeFi Pulse 🍇 (@defipulse) November 23, 2019

The other 200,000 Eth mostly comes from growth on the Synthetix derivative platform. This platform has been growing slowly and steadily, but experienced a spike around the time DAI was released. On their platform, users can long or short any crypto, commodity, stocks and stake their Synthetix token for rewards.