DeFi Tokens Outperform Market Because of Adoption, Technology and Sentiment Change: Analyst

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Tue, 06/09/2020 - 14:23
Vladislav Sopov
Anonymous cryptocurrency analyst Ceteris Paribus has explained to Messari's Qiao Wang, which catalysts have boosted DeFi token prices in Q1-Q2, 2020
Cover image via stock.adobe.com
Contents

An analyst has highlighted the top beneficiaries of the DeFi segment market capitalization upsurge and revealed some of its possible catalysts.

Altseason? No, DeFi season!

According to Ceteris Paribus, native digital assets of decentralized financial instruments significantly outperform the market in terms of prices. Kyber Network Crystals (KNC), Aave Protocol Tokens (LEND) and Loopring Coin (LRC) have gained more than 300% since June 2019.

Image via Twitter

The calculations are based on data provided by the Messari and Coingecko analytical sources.

According to the estimations of Ceteris Paribus, all of the ecosystems of DeFi products gained $700M in terms of market capitalization. The mid-caps, i.e. the products with $10M-$30M in capitalization as of the end of 2019, benefit the most from this trend.

Only three projects see their tokens down compared to June 2020, namely, Acropolis, Synthetix and Cred.

Where is the trick?

Angel investor and analyst Qiao Wang asked Ceteris Paribus, which catalysts drive the token performance of DeFi assets. He responded, saying that an increase in the volume of assets under management, mainnet launch announcements and changing token structures contributed to this success.

Also, Ceteris Paribus noticed a switch in sentiment from Layer-1 products (i.e. new blockchains) to Ethereum-based application development. Depressed valuations amid the 2018-2019 bear market and the upsurge in liquidity may be also involved.

Elias Simos, a senior research analyst in Decentralpark, believes that fee-driven DeFi products are used to providing access to Ether flows.

Thus, Ethereum (ETH) works like money in the decentralized world, Mr. Simos concluded.

About the author

Blockchain Analyst & Writer with scientific background. 5+ years in IT-analytics, 2+ years in blockchain.

Worked in independent analysis (Crypto Briefing) as well as in start-ups (Swap.online, Monoreto, Attic Lab etc.)

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