DeFi Tokens Continue to Bleed as Bitcoin Dominates

In terms of total value locked, the DeFi space still looks bullish with just an 8% decline in crypto collateral across the ecosystem since its all-time high. The current figure stands at $11.3 billion according to DeFi Pulse, however, the dollar-denominated metric remaining high could be due to Ethereum prices reclaiming $400. The same cannot be said for the majority of DeFi-related tokens though, as most continue to tank while Bitcoin’s market share slowly consumes them. Messari researcher Jack Purdy blames this on an oversaturation of projects combined with not enough new capital entering the space.

Bloodbath continues.

This is what happens when there's too many projects with not enough new money entering the space

For those that are able to provide real value though we'll look back and salivate at these valuations 🤤 pic.twitter.com/jsHO3GsTW9

— Jack Purdy (@jpurd17) November 4, 2020

DeFi Dump Continues

Funds that were hastily thrown into DeFi tokens over the summer appear to be shifting into Bitcoin as BTC recently hit an almost three-year high of $14,400. Looking at the top tokens by protocol, Uniswap’s UNI is suffering among the rest with another 5% slump so far on the day and is trading for $1.82. Since its all-time high of nearly $8 in mid-September, UNI has lost 76%. That decline may well deepen further when the token farming ends on Nov 17 and millions are dumped onto the market.

$UNI – Now sub $2, not surprising. When you hand out millions of tokens for free you can't be surprised when they all start selling. I just hope people sold when they had a chance much higher. pic.twitter.com/5sli91bJre

— IncomeSharks (@IncomeSharks) November 5, 2020

Moving down the list to second in terms of protocol TVL is crypto stalwart MakerDAO, which is actually holding up nicely as its native MKR token has remained relatively stable in terms of price over the past year. Wrapped Bitcoin is third in terms of TVL and it too has increased to record levels of over $2 billion of BTC tokenized on Ethereum.

More Pain on the Horizon

Compound Finance’s COMP token continues to take a beating with a 74% slide from its peak while Aave’s 100x token supply reduction scheme hasn’t prevented its new asset from dumping 52% since this time last month. The Curve DAO token, CRV, is in a world of hurt losing another 4% today and an agonizing 98% since its all-time high during the DeFi hype in mid-August. Synthetix is up on the year but has still dumped 64% since its $7.50 peak at the end of August. Yearn Finance’s YFI surged to a massive $44,000 at the peak of the DeFi FOMO but has since dumped 80% to current prices around $8,450. The pain is even greater for the raft of other DeFi doppelgangers such as Sushi and Swerve, which have virtually collapsed into digital dust.