A study of the dYdX cryptoassets platform points out that almost all DeFi assets (decentralized finance)have appreciated in comparison with the bitcoin in the three months to June. According to the analysis, the market would have begun to take the fundamentals into account. “And since DeFi protocols have had the most traction, they are also seeing the largest capital inflows”.
In addition, many of these tokens are improving the mechanisms by which they ensure greater value for their holders. Thus, most of them are based on fees and a governance protocol.
Currently, bitcoin volatility is lower, but the study says it will be interesting to follow the DeFi when this oscillation comes back stronger. “In general, the low volatility of the bitcoin gives other assets more breathing space, as investors shift their attention away from bitcoin”, the document says. A robust performance amid the increased bitcoin volatility would indicate that the market sees the DeFi as independent from the bitcoin.
DeFi Assets outperform the market
Another positive aspect is that after two years of weak performance for “almost all cryptoassets aside from the bitcoin, ”the performance of the assets with DeFi protocol has surpassed the rest of the market. “What started as some financial engineering experiments quickly turned into an emerging crypto asset class”, evaluates Dydx. And he adds: “It seems that DeFi is finally starting to absorb parts of CeFi (or centralized finance).
What started as some financial engineering experiments quickly turned into an emerging crypto asset class.
Yet, the document highlights the speed of this sector’s growth, much higher than the crypto assets that came before. “Decentralized Exchanges, including dYdX”, processed a volume more than 1700% higher in May 2020 than in January 2019”, the company said.
This valuation, however, is not mere chance, but can be based on foundations, points out the text. This is because many of these networks are based on tokens that gain value with the growth of their use. Thus, their appreciation can be based on elements such as the money flows for that token.