Decentralized Finance (DeFi) Tokens are on Fire, Market Cap Surpasses $3.2 Billion


Bitcoin is stuck in a range but not altcoins.

This is the perfect time for altcoins to rally. The likes of Verge (XVG) (17.76%), Vechain (VET) (10.79%), Zilliqa (ZIL) (9.49%), and Cardano (ADA) (9.06%) are enjoying good gains today.

But among altcoins, it’s time for DeFi tokens to shine.

They have been surging throughout 2020, especially since March sell-off.

“As people are starting to realize, DeFi tokens are outperforming this year,” noted analyst Ceteris Paribus. “The sweet spot has been tokens with $10-30m market caps at the beginning of the year. This universe of tokens has increased their collective market caps by ~$700m in 2020.”

The market capitalization of DeFi has surpassed $3 billion, currently at $3,228,685,123, as per DeFi Market Cap.

DeFi tokens meanwhile continue to lead the market gains. Even last week, amidst the broker market rout, they recorded gains. Many tokens in this sector are posting upwards of 100% to 500% returns YTD.

Defi-on-fire

While some DeFi tokens are generating income in the form of a staking yield, others in the fee.

“Real investors in this space are flocking to these value assets while running from the non-productive “if you build it, they will come” legacy cryptocurrencies and protocols. And we believe that’s a good sign for long-term health and growth of this asset class,” said Jeff Dorman CIO at Arca.

Growing Sector

The sector basically represents those companies and projects that cut out rent-seeking middlemen in the new “open finance” ecosystem.

Today, the total value locked in decentralized finance (DeFi) has yet again surpassed $1 billion.

Although, this figure is nowhere near the traditional banking and brokerage sector, “it is nonetheless an impressive feat for DeFi to gain significant traction while the U.S. economy becomes more and more untrustworthy to the average citizen,” Dorman said.

In the past few weeks, some of the projects released significant upgrades. While Bancor announced a new upgrade to its protocol, Kyber Network has released its mainnet. Aave, which is quickly catching up on Compound, is seeing a surge in demand for popular stablecoin Tether (USDT).

Nexus Mutual, an insurance provider for Ethereum-based DeFi protocols has been seeing its risk pool doubling over the past two months.

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