Slow Recovery for DeFi Tokens on Positive Crypto Industry Developments: Report
It may not seem like it today, with crypto markets tanking, but DeFi assets have been steadily recovering over the past month, according to Glassnode.
On July 31, on-chain analytics platform Glassnode published a report on the state of DeFi tokens amid this year’s regulatory issues.
“Regulatory conditions in 2023 have been a tug-of-war between positive and negative news, with altcoins and DeFi tokens being the most heavily impacted,” it stated.
Regulatory conditions in 2023 have been a tug-of-war between positive and negative news, with altcoins and #DeFi tokens being the most heavily impacted.
With #MKR and #COMP experiencing significant out-performance in recent weeks, we explore how we can extract information from… pic.twitter.com/zkIzfdYbRl
— glassnode (@glassnode) July 31, 2023
DeFi Token Recovery?
The report noted that several positive developments in the crypto asset industry have been beneficial to the DeFi sector.
“The uptick in DeFi token interest has sparked the interest of market makers, who have increased liquidity in the respective pools, indicating a positive outlook for trading and price activities around these tokens.”
The firm referenced its “DeFi index price,” which it claims has rallied 56% since the low set in mid-June.
Glassnode’s DeFi index consists of the top 8 such tokens by market cap. Furthermore, it has established an almost two-month-long uptrend relative to Ethereum, it added.
CoinGecko’s DeFi token category, which contains hundreds of DeFi tokens, has also seen an increase of 22% since mid-June.
It should be noted, however, that most DeFi tokens remain painfully down from their peaks, many by over 90%.
Glassnode said that two tokens stand out, and these are MakerDAO (MKR) and Compound Finance (COMP). Their performance “may well be closely related to new project fundamentals, rather than wider market developments,” it noted.
There has also been a slight upshift in DEX trading volumes for DeFi tokens, but it still remains in bear market lows, the report added.
No Love for Crypto Today
Crypto markets are currently in sharp free fall, with total cap dropping around $20 billion over the past couple of hours during Tuesday morning Asian trading.
As usual, altcoins and DeFi tokens have been hit harder than BTC and ETH.
DeFi tokens are all in the red at the time of writing. The largest losses are from Aave (12%), Synthetix SNX (8%), recently exploited Curve DAO CRV (17%), Compound COMP (18%), and Frax Share FXS dumping 13% on the day.
Around $1 billion has left DeFi tokens over the past 24 hours, keeping most of them at multi-year lows. Therefore, that recovery might be slower than Glassnode has envisaged.
The post Slow Recovery for DeFi Tokens on Positive Crypto Industry Developments: Report appeared first on CryptoPotato.
