What’s the recent sharp fall of DeFi (DeFi prices)?

08/09/2023 03:04 • Metaverse Matters • 80 views

What’s the recent sharp fall of DeFi? According to Decrypt, the recent sharp fall of DeFi is mainly due to the skyrocketing of DeFi tokens. Some people call DeFi a “scam” because they consider it a very risky investment tool; others say that the project is outdated. These scammers have caused huge losses to investors in various ways. Meanwhile, some of the most famous decentralized finance (DeFi) protocols, such as Compound Finance, MakerDAO, and Synthetix, have made a sensation in the cryptocurrency market.

From the above figure, although the prices of most DeFi tokens are still stable, there haven’t been many innovations or new products in the DeFi field. For example, the recent hack of Compound Finance resulted in a loss of about $1 billion.

DeFi prices

Editor’s note: This article is reprinted with permission from Odaily Planet Daily.

The price trend of DeFi tokens is consistent with the overall market trend in the past 24 hours.

Since reaching a historic high on August 10, the market value of DeFi has grown to over $200 million, creating a historical high. However, despite some fluctuations in mid-September, there are still a large number of new projects appearing, such as Compound and Yearn Finance (YFI).

According to data from defimarketcap, in the past week, the top ten decentralized finance applications were valued at $1.656 million, $716,000, $507,000, $128,000, and $186,000 respectively. On February 14, this number broke through the $300,000 mark for the first time, reaching the highest level in nearly 12 months.

As prices rise, other major cryptocurrencies have also started to rebound, including Bitcoin, Ethereum, XRP, and other mainstream altcoins. In the past few weeks, the price of the largest decentralized stable asset DAI has dropped by more than 30% since the beginning of the year. Although there has been a recent rebound and a high increase, there are still some projects that have not shown much positive performance.

For example, MakerDAO is one of the largest DeFi protocols with a locked volume of $3.2 billion. At the time of writing this report, it controls about 10% of the total supply of tokens dominating the DeFi field, while Uniswap only controls 4% of the market share with its lower token price; Aave has the lowest trading volume, which is $1.5 billion, meaning that its total locked funds have dropped by more than 50% from the previous bull market peak.

In addition, the performance of stablecoins in the past few weeks has been disappointing as they usually make adjustments before prices surge. Although some cryptocurrencies may experience sharp falls in the near future, many people are optimistic about the long-term prospects of DeFi.

The strong momentum of the DeFi market is attracting investors’ attention, especially those companies that invested in DeFi tokens in the summer of 2020. They hope to use their funds to increase the valuation of their own companies, even if this may not necessarily bring any impact or damage.

According to the latest research data from Messari, the price trend of DeFi tokens is similar to the previous macro perspective. Therefore, although the value of these projects is overestimated, most DeFi tokens are still in an upward trend in the current bear market phase. And due to their relatively mature and easy-to-use characteristics, many crypto assets are facing similar developments.

Original source: ambcrypto, compiled and translated by Blockchain Knight. English copyright belongs to the original author. Please contact the compiler for Chinese reprint.

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What’s the recent sharp fall of DeFi (DeFi prices)?

DeFi prices

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