Data from Messari shows that over the past 30 days, the majority of tokens listed on the site’s DeFi Assets index have grown by more than 20%. A few stars like Maker (MKR) Synthetic (SNX) and SushiSwap (SUSHI) have gained more than 100% during the same period.
From January 1 to January 9, the decentralized financial sector saw its Total Locked-In Value (TVL) rise from $ 15.678 billion to a record high of $ 23.092 billion and this recovery to a new all-time high came about 4 months after the DeFi bull. the deal came to an abrupt end.
Now that Bitcoin (BTC) and Ether (ETH) have reached multi-year highs, investors are once again looking to the DeFi sector and it is likely that the start of a new bull market, TVL’s surge on The main DeFi platforms and the regular integration of Ethereum alternatives are the main reasons for the current surge.
Bitcoin and Ethereum carry the market higher
The last few months of Bitcoin and Ether price action is undoubtedly having a positive effect on the entire cryptocurrency market. Currently, the combined market capitalization of the two main digital assets is over $ 850 billion, or 80% of the total value of the cryptocurrency market.
As the price of major cryptocurrencies rises, some investors are looking for ways to maximize their profits and the high stake yields and four-digit returns on investment offered by many small-cap tokens have proven to be an irresistible draw to traders.
Historical data shows that when Bitcoin and Ethereum prices recover altcoins tend to follow and when Bitcoin consolidates into a “ predictable ” range, altcoins and DeFi tokens generally rally. This market dynamic could partly explain the recent surge in DeFi tokens.
Total locked-in value is on the rise
Data from DeFi Pulse shows that the total value locked between DeFi protocols has increased from $ 15.36 billion to $ 22.74 billion in the past 10 days. This sharp increase in TVL coincides with Bitcoin’s rally from $ 29,000 to $ 41,950, a record high and during the same time, the price of ether also rose from $ 740 to $ 1,300.
A number of high-profile partnerships and mergers between some of the top-ranked DeFi protocols are also attracting new funds to the DeFi industry. In early December, Yearn.finance and SushiSwap, two of the leading DeFi projects, announced a merger that saw the protocols expand resources and integrate their cash pools to increase the total locked-in value.
Developments like this help create a safer and more efficient user experience for community members and, in this case, helped increase the YFI price by $ 18,255 at the start of November 26, 2020 to the highest of January 9 to $ 39,990, an increase of 118%
DEX volume increase
Volume and transactions are key metrics used to assess the value of a DeFi project and the strength of its community. One way to determine this is to look at a project’s daily decentralized exchange (DEX) volume to get a picture of the value of transactions on the protocol over a given time period.
Since the start of 2020, DEX’s daily volume for top-ranked DeFi projects has more than doubled from $ 900 million on January 1 to a high of $ 2.4 billion on January 4, indicating a significant increase of user activity. This suggests that traders took advantage of the bull market conditions experienced by much of the cryptocurrency market during this time.
With Eth2 still being rolled out, a critical issue to watch out for during any DeFi boom is Etheruem gas fees and transaction speeds. Data from Messari also shows that DeFi tokens focused on Layer 2 solutions have rallied heavily as developers seek ways to successfully integrate faster, cheaper off-chain options that can work as alternatives to Etheruem. .
As reported by TBEN, tokens like Solana (SOL), Loopring (LRC) and Matic and ThorChain (RUNE) have all come together as developers continue to research and experiment with Layer 2 options.