Ethereum's Economic Boom, Yield Farming, and the Rise of the Smart Dollar

Q3 was insane.

Markets heated up to their hottest point since the 2017 ICO boom, and billion dollar protocols emerged out of nowhere. Yield farms attracted hundreds of millions of capital flow in days and DEX volumes surpassed centralized rivals.

There are two key developments over this past year that made this all possible: stablecoins and DeFi.

The Evolution of stablecoins

Since 2019, stablecoins have grown substantially, providing users with a stable means to store and transfer value on public blockchains, while DeFi protocols have matured enough to the point where they can facilitate meaningful financial activity.

In Q2, the stablecoin monetary base grew by $3.8 billion, putting the stablecoin market cap at $12 billion to start the third quarter. In Q3, the stablecoin monetary base grew $8.2 billion, blowing past $20 billion aggregate market cap in the process.

To put that into perspective, $8.2B in quarterly growth was more than the past four quarters combined.