DeFi (decentralized finance) seems to have really come to stay. The boom in DeFi tokens has brushed aside a few “sweethearts” altcoins from the market, Cointelegraph reports. Recently, the Yearn.finance token reached US$ 38.000,00, a record that leaves behind even the famous bitcoin. In addition, in August, the capitalization of the DeFi market reached US$ 15 billion (more than R$ 79 billion, according to the trading price of the day this article was written), according to Decrypt. But the market is now wondering how long this movement will last.
One of the most commented DeFi of the moment is Aave. Its token cost US$ 0.68 (when this article was written). The value may seem low, but it surpasses that of Ripple, which is the fourth cryptocurrency with the highest market value. On the day this text was written, altcoin was quoted at a mere US$ 0.25.
The risk, however, lies in a possible bubble. Although a dYdX study points out that DeFi valuation may be based on market fundamentals, some point to a possible bubble. According to the Cointelegraph, the price of DeFi assets rose 42.9%, 56%, 60.5% and 168.4% in May, June, July and August, respectively.
This is because DeFi was so hot that there were some tokens called “meme tokens”, in a reference to the images with jokes spread on the Internet.
Altcoins can become an alternative to DeFi
The issue is that some of them ended up suffering strong devaluation. Sushi token, for example, lost 50% of its value in 24 hours after its creator, the “Chef Nomi”, was suspected of exit scam. This happened when “Chef Nomi” decided to liquidate all his tokens and exchange them for ETH, explains Decrypt. Another token named after food, the Hotdog crashed 99% in five minutes a few hours after its launch.
Despite the segment’s resounding success, that’s the reason for the alert that many DeFi tokens have little to offer their investors. The Cointelegraph recalls that in June, Sasha Ivanov, founder of the Waves Association, made a parallel between the DeFi boom and the ICOs (initial currency offerings) of 2017. It is worth remembering that after the investors’ frenzy with cryptocurrencies, the market fell sharply the following year.
Therefore, it is believed that at some point, investors will leave the DeFi aside and look for better known assets, such as bitcoin or altcoins, in search of a more guaranteed income.