DeFi Bounces to Outperform Shitcoin Index; Compound Kickstarting Round 2 of DeFi Summer?
Decentralized finance (DeFi) space is enjoying some greens again.
The total market cap of DeFi is now recording a bounce at over $74.4 billion, up from just under $61 billion in late June. However, it has a long way to go as on May 12; the peak was at almost $143.7 billion.
In the past 24 hours, the coins that made notable gains include Synthetix (SNX), up 19% at $9.30. As we reported, in the past week, Synthetix was also among a handful of projects that recorded increased revenue.
Last week, Kain Warwick, founder of derivatives liquidity protocol Synthetix, also came back after previously stepping away from the protocol to take on a “more passive role,” but has now declared his intention to run for the Spartan Council, an eight-member governance DAO that votes on and manages changes to the protocol.
Other gainers include ALPHA (10%), KAVA (7%), RGT (5%), CAKE (3%), AAVE (2.63%), and COMP (2.57%).
— CL (@CL207) July 4, 2021
When it comes to past 7-days, other gains include RGT (50%), COMP (35%), REP (34%), BAL (31%), SNX (28%), Maker (24%), and AAVE (20%).
Compound Finance (COMP) is of importance here as the DeFi protocol now targets institutional investors by offering attractive fixed 4% APR on US dollars with daily liquidity but with none of the complexity of crypto.
“Our vision is that Compound Treasury becomes the bridge for non-crypto financial institutions to deliver the core benefits of DeFi to the next billion users,” said the team next week at the announcement of Compound Treasury.
It has already started onboarding customers and is planning to expand access to it “significantly over the coming months.”
According to trader Loomdart of eGirl Capital, given that traditional investors take too long to deploy capital, “Everyone is late to yield farming but its still better than negative interest rates but now all that money is cheap fuel for sharper people who can utilise it better.”
— 🐵👑 (@loomdart) July 4, 2021
In the current environment of zero to sub-zero interest rates, institutional investors are seeking yield, and through these DeFi products, they are getting much higher returns without even gaining direct crypto exposure and the volatile price action.
It’s not even just Compound, but Aave is all set to attract the institutions as well, for which it first started testing its private pools in May.
As Stani Kulechov, founder and CEO of popular lending platform Aave, a competitor of Compound, confirmed on Sunday, they are launching Aave Pro this month.
Interestingly, Compound Finance started the DeFi summer last year after introducing yield farming, and it just might start round 2 after introducing fixed interest rates for institutional investors.