Even as the traditional shiny asset gold has been the best so far with return over 20%, latest digital assets popularly referred as digital currencies or cryptocurrencies because of the mania surrounding it has become the best performing asset of this year.
The Bloomberg Galaxy Crypto Index of digital coins so far in this year 2020 is up by about 66%, which is higher than gold's sharp rally of more than 20% and even when compared to returns from stocks, bonds and other commodities.
The surge of this scale in cryptocurrencies is primarily attributed to a jump a Ethereum, which accounts for over 33% of the weight in the crypto measure. A strategist at Bloomberg Intelligence as cited in the Bloomberg report said, "Ethereum maintains its platform leading status as there is seen increasing adoption of decentralized finance, or DeFi".
Decentralised finance transition financial functions on to digital ledgers referred as blockchains and help individuals to carry out lending and borrowing activity, thus enabling them in earning interest in a savings like account. Herein the traditional intermediaries such as banks are not involved. And with increasing usage of blockdown there has been witnessed increasing popularity of DeFi.
Further, the increased adoption of DeFi is imminent from Fasset data which runs a blockchain based marketplace for infrastructure investment.