As reported, the recursive addition of deposit in various DeFi projects with the use of one and the same initial investment has a tendency towards increase of the value blocked in projects to almost 50%.
Data distorting the real state of things
Data analysis websites reporting about “total value fixed in DeFi” define indicators via analyzing separate projects.
Still the ecosystem has notable compatibility. DAI represented in one solution can be used as a guarantee for getting a credit on some other platform.
DeFi Pulse demonstrates that TVL is about $6.29 billion. According to Damit Bandalo, a well-known investor and developer, the “actual” total amount of funds being kept in decentralized finance projects, is approximately two times less that reported.
There is nothing special about that for crypto markets. Earlier analysts’ estimates indicates that a real dollar invested in BTC or some other crypto is multiplied by 10–20 times according to value indices’ scales.
Besides, the net exchange trade with the purpose of overestimation of crypto trade volumes remains to be a problem for digital currency markets. It used to be a standard practice for most exchanges but this also creates additional risks of collapse.