By
Chimamanda U. Martha
April 18th, 2024
DeFi markets are seeing a sharp correction amid heavy profit-booking in the market. Over the last week, top DeFi tokens registered double-digit corrections. The positive indicator is DeFi users have multiplied by 3x over the last three months.
The Decentralized Finance (DeFi) space has finally entered a massive correction after a blasting summer season. The DeFi market has made a sharp downfall in the last 24 hours with the combined market cap of DeFi assets tanking over 25%. Interestingly, the daily trading volumes have also dropped over 30% in a single day.
In a blog post today, October 8, the crypto analytics platform Santiment notes that the most favorite DeFi tokens are the hardest hit over the last week. SUSHI is down by 50%, Uniswap’s UNI governance token is down by 38.2% and Yearn.Finance (YFI) is down by 31.3%. The blog post notes:
It’s the slaughtering of the sacred DeFi cows. The crypto market has been engulfed in a sea of red this week, with most DeFi blue chips recording double digit losses over the past 7 days.
Interestingly, Santiment also claimed to identify some “whale accumulation” process around DeFi assets like Synthetix (SNX). Moreover, the total value locked (TVL) across DeFi platform has also tanked by 10%. At press time, the TVL across all DeFi protocols is $10.03 billion as per DeFi Pulse. Uniswap continues to dominate at over $2.2 in TVL i.e. over 22%.
Some crypto analysts have already started talking about the bubble burst in the DeFi market. Also, the popular Yield Farming tokens like Yearn.Finance (YFI), Aave (LEND), Compound (COMP) are the worst losers of the last week.
On Sept 2nd I shared the following:
"In case I haven't been clear. TAKE PROFITS. I most certainly have been. #DeFi is a bubble. There are now multiple protocols that have crossed the chasm from yield farming to ponzi economics"$ETH hit $480 top that day. Were you greedy? 💎⤴️🚨 pic.twitter.com/zSnCKJInfE— Alex Saunders 🇦🇺👨🔬 (@AlexSaundersAU) October 8, 2020
Some Positive News for Investors in DeFi Market
While the sudden market crash has recently caught the attention of DeFi investors, the overall picture is not as bad as it looks. As per Messari’s DeFi tracker of the top 46 assets, the collective return is more than 500% year-to-date. The last 90-day collective returns also stand above 100%.
Many of the popular DeFi tokens’ year-to-date returns are in multiple of 100s. The tracker shows that the combined market cap of the top 46 DeFi tokens is around $4.3 billion i.e. nearly 1.5% of the overall cryptocurrency market cap. The top-performing DeFi token for 2020 is Aave (LEND) with 2264% year-to-date returns. The second-best performing DeFi token is Yearn.Finance (YFI) with 1087% returns.
Another positive indicator for the DeFi market is that the number of DeFi users has tripled in the last three months, and now at half-a-million, as per data by Dune Analytics. Some of the top DeFi platform in terms of user-base growth are Kyber Network, 1inch, Compound, and OpenSea.
Uniswap users have multiplied by 5x over the last three months. At present, there are nearly 390,000 unique Uniswap users.