Last week, bitcoin broke through $18000 to $18281. It has reached a new high since this year and the highest level since January 2018.
Bitcoin has always been the leader, rising strongly. However, since the release of the deposit contract of ETH 2.0 on November 4, ETH also began to recover strongly from $370, breaking through $400 again, and then all the way to a high of $580.
However, with the development of ETH 2.0, the most attractive thing in the near future is the DEFI’S strong rebound.
Back to DeFi’s first session, half hype, half bubble
Throughout the evolution history of the DeFi field, this field was almost ignored before 2019, and it was in 2019 that the field really attracted attention. Because it can meet the financial needs of people that traditional finance can’t. DeFi builds a transparent financial system in which crypto assets, financial smart contracts and protocols can be combined like Lego, hence the name “Money Lego” .
As you can see from the defipulse data, DeFi’s performance has been very quiet over the past few years, with some improvement in 2019 and a significant increase in total locked volume beginning in June. The timing changed on June 16, when the Compound launched the distribution event of “lend-and-mine” to the Governance Token COMP. DeFi quickly emerged as the newest hot trend in the blockchain industry.
Relying on the basic LEGO module, the number of related DeFi products has increased dramatically, the ecosystem has become more and more perfect, and more and more participants have participated. It covers more than ten categories, including decentralized exchanges, lending, derivatives trading, stablecoin, and analytical tools.
For example, synthetix emerged in the second half of 2019 by virtue of synthetic asset trading, occupying an important gateway. MakerDAO, which launched decentralized stablecoin, laid the foundation for infrastructure construction and became the foundation of DeFi. Uniswap, a decentralized trading platform, has become one of the important Legos in the DeFi world from its initial scale to its firm foothold. In June to September, when the DeFi was the hottest, there were also many forked projects and various food/emoji tokens that made a lot of attention.
As the hottest topic in the whole blockchain industry this year, DeFi attracted a lot of institutions and funds to enter. However, driven by the FOMO sentiment and the overflowing of the project, the DeFi market gradually cooled down: prices falling, hacking attacks, code loopholes and other accident superimposed together, which broke the bubble in the DeFi field.
A large number of farming projects showed a decline, the whole market tends to calm down, UNI fell from the highest $8 to less than $2, star item yearn.finance The price of yfi fell from a peak of $44000 to below $8000. There are also projects such as compound, balancer and curve. Since the beginning of September, the currency price has fallen by at least 60%.
DeFi’s short recession is downhearted, but the breakup of bubbles is good for the whole industry.
Ethereum financial building is gradually taking shape, and defi2.0 is inclined to the leader
According to DefiPrime data, there are currently 215 DeFi projects, of which 203 are based on Ethereum, 22 are based on EOS, and 26 are based on BitCoin. The total number was about 30 less than that in September.
Last week, driven by the continuous rise of Bitcoin, the DeFI sector experienced a sharp rebound, and the leading projects represented by YFI and UNI rebounded more than 100% within a week. According to Messari, a crypto market analyst, YFI was the best performing DeFi asset in the past week, and is trading at $23491 again, well above the price of bitcoin.
It is understood that the inflow of funds from traditional institutions into DeFi is one of the reasons for this wave of rebound. As of November 12, Polychain Capital, a top investment institution, has become the 10th largest YFI holder, with 470 YFI in total, accounting for 1.6% of the supply. Polychain is also hoarding several other DeFi tokens, including compound (COMP), maker (MKR), etc.
In addition, the rebound is different from the past is that the entire market began to split, the market obviously more recognized the leader of each subdivision field, and no longer lack of thinking as before.
According to the data listed by DefiPulse, the top 10 projects with MOST TVL are basically the leaders in different tracks and segments: Uniswap has become the leader of the decentralized exchange, and has become the head project. Maker, compound and AAVE occupy most of the TVL in the lending field. In terms of assets, WBTC, harvest finance yearn.finance come out in front.
The fundamentals of the defi industry are still improving. The impact of the collapse in the secondary market has been quickly eliminated. At present, the total lock up volume of the defi industry has exceeded $15 billion, compared with $690 million in January this year. It can be seen that decentralized finance is still a potential blue ocean market. This further proves that flower briefly as the broad-leaved epiphyllum is not a flash in the market, but a real financial innovation, and the product and market match is realized in DeFi.
As for the next development, people’s requirements for the quality of the project will certainly be higher and higher. The market trend also confirms this judgment. The old brand projects start to bring forth new ones, and the new projects are constantly exploring innovative ways to play.
It can be said that defi has just started, and more high-quality projects will stand out in the future. The “financial building” of Ethereum is taking shape. I believe it will eventually develop into a brand-new field that can be compared with the traditional financial industry. Let’s wait and see!