Ethereum is the backbone of decentralized finance (DeFi), enabling a wide range of financial services—such as lending, borrowing, trading, and yield farming—without intermediaries. Its smart contract functionality allows developers to create automated protocols that replace traditional banking functions, all while maintaining transparency and security.
Major DeFi platforms like Aave, copyright, Compound, and MakerDAO all run on Ethereum. These protocols use ETH and ERC-20 tokens to facilitate transactions and incentivize users. Ethereum’s composability—its ability to let different copyright work together—has led to an explosion of interconnected financial tools that users can access from anywhere in the world.
As the DeFi ecosystem grows, the demand for ETH increases because ETH is required for gas fees and often used as collateral or liquidity in these protocols. This growing utility creates a strong foundation for Ethereum’s value proposition.
Moreover, innovations like liquid staking and synthetic assets continue to expand the possibilities within DeFi, further cementing Ethereum’s leadership. Institutions are also exploring DeFi integrations, adding another layer of growth potential to Ethereum’s use case.
Because DeFi is one of Ethereum’s biggest value drivers, its health and expansion directly affect the eth price. Investors and users alike can observe how DeFi activity influences ETH’s market performance by checking the up-to-date eth price on Toobit.