These DeFi Tokens Leading the FOMO Rally
The total value locked in Decentralized Finance (DeFi) continues to hit new highs. Today, it reached a new peak of $1.88 billion, as per DeFi Pulse.
While the amount of BTC and DAI locked are also at its all-time high at 10.4k and 120.4 million respectively, the total Ethereum locked in DeFi at 3.1 million ETH is also close to its high at 3.2 million earlier this year.
Compound (COMP) remains the dominant force in the DeFi space ever since it replaced Maker (MKR) last month.
Also, the market cap of DeFi has surpassed $7 billion.
This growth is the result of the astronomical increase in the price of DeFi tokens in 2020.
If we take a look at the price performance of ETH and DeFi ERC20 tokens in 2020 so far, the gains recorded by the second-largest cryptocurrency are minuscule compared to the latter.
As analyst Ceteris Paribus shared, Auctus (AUC) with over 6,400% spike is leading this surge followed by Ampleforth (AMPL) with 1,600% returns YTD.
Kyber Network and Aave recently began surging as people started FOMOing after COMP’s significant returns and thanks to the upcoming upgrade and staking coming to the network. These tokens left behind the likes of DeFi token Chainlink (LINK), the 12th largest cryptocurrency which is just 2% away from its all-time high of $4.97.
While some celebrate this growth, calling the space a revolution, many are pointing out its limitations.
“DeFi is DeFinitely fractional reserve banking, DeFinitely not a new financial revolution, DeFinitely repeating the same mistakes, DeFinitely will fail.” said Obi Nwosu, the CEO of UK-based bitcoin exchange CoinFloor who advised to simply “stack sats on.”
Interestingly, last week, the amount of DAI stored in Compound Finance exceeded the total DAI in existence, highlighting the frenzy in the space.
DAI on chain: 108m
DAI in @compoundfinance : 344m
— Dan Yanev (@dan_yanev) July 2, 2020
Meanwhile, Stelian Balta, chief executive of digital assets management company HyperChain Capital said DeFi “has a huge opportunity to grow” as such, they continue to invest in the space.
He is also “bullish on the crypto market long term, especially in DeFi,” and says the ongoing “capital deployment and institutional investors recent interest in Bitcoin, add lots of optimism in the market” which is “the early stages of a new, decentralized global financial system.”