The DeFi track is gradually coming into the public eye in the first half of 2020. Both $YFI, which once surpassed $BTC in price, and $UNI, with its big airdrop tokens(worth up to $18,000), made their participants rich. There are also DeFi projects such as $AAVE and $COMP that have performed very well since then, have also made a lot of investors rich.
The current market, since November 2021, $BTC has reached its lowest point from $69,000, a drop of more than 50%. Recently $BTC trend has picked up and the bottom has appeared strong demand, bouncing nearly 40% from the bottom. And it keeps setting new highs, but there is no sign of a pullback.
From September 2020 to April 2021, most of the projects in the DeFi track rose well above $BTC in the same period, leading one of the most wild bull markets in history, allowing all crypto-world enthusiasts to see $20,000+ bitcoins and capitalizing on the boom to take $BTC from $10,000 to $64,900 in just six months. Besides, it also made the insiders really realize the huge profit of the crypto market, and also succeeded in making more outsiders understand and join the crypto market.
But the sharp fall on May 21 poured cold water on crypto market enthusiasts and showed everyone the cruelty of the crypto market. $BTC's sharp fall caused a cascade of liquidations, bringing the maximum drop of the day to 31%. But altcoins were even worse, many of them dropped by 70% or even more than 80% that day. After 2 months of bottom oscillation under the gloom, the crypto market has opened a new bull market.
After the opening of the new bull market, the projects in the DeFi track remain very strong from July 2021 to November 2021, and continue to follow $BTC steadily up after having just experienced a significant rise.
From the chart above, we can clearly see the strength of the DeFi track in this round of rise. Now BTC has risen 40% from the bottom, and the DeFi track has seen a significant increase in recent trading volume, but the price has not fluctuated much. For this phenomenon most of the investment researchers who are deep into DeFi believe that the DeFi track is already at the end of the absorption pattern and still has a large development space. This is because DeFi is a great way to improve capital utilization and expand income for the crypto market. This is an essential part of the financial industry. WILLIAM SUBERG, a well-known Telegraph writer, also believed that a new round of bull market is about to start in his article on March 2, saying that DeFi will lead the next wave of bull market. (Link to original article: https://cointelegraph.com/news/bitcoin-casts-off-dip-climbs-past-45k-as-fed-signals-rate-hike-coming-in-march)
The main demand market for crypto lending & borrowing lies in: meeting the funding needs for trading activities, such as arbitrage, leverage, market making, etc., and to provide passive income for crypto investors who want to hold crypto assets for a long time but want to be able to generate additional income.
The lending & borrowing category, which had reached a peak of $50 billion in funding, has dropped by 28% to just $36 billion, accounting for 46% of the overall DeFi market.
DeFi's yield aggregator is an aggregation platform that supports multiple DeFi protocols. As DeFi's yield aggregator, the core mission is to aggregate the income of each DeFi underlying protocol, automatically allocates the liquidity provided in the DeFi ecosystem to different pools through dynamic adjustments to achieve profit redistribution.
DEX is a permissionless and non-custodial exchange. Unlike traditional centralized exchanges, it does not store user funds and personal data on servers, but only serves as an infrastructure to match buyers and sellers who wish to buy and sell digital assets, where all transactions are done through smart contracts.
The main features of DEX are: no custody, no KYC, no registration and login, just a wallet to complete asset transactions. All of the user's assets are stored in their own wallet, thus fundamentally avoiding the risk of asset theft and runaways on centralized exchanges. But when using decentralized wallet exchanges, users also have to keep their wallet's private keys and assets safe.
DeFi's derivatives is considered to be one of the most promising markets in DeFi, including synthetic assets, options, prediction markets, perpetual contracts, insurance, and interest rate derivatives and more in six major directions.
Derivatives have always been one of the most important parts of the global financial market, providing investors with diversified income paths and be an indispensable role in hedging market risks. Its market size is often dozens of times that of the spot market.
It can be seen that the lowest ROI ratio of the leading projects in each track category is 523%, and the highest even reaches 12536%. Therefore, under the premise of being optimistic about the future development of the DeFi track, 5 high-quality projects have been selected from 100+ DeFi projects, namely UFT, RGT, CVP, MIR and CREAM. These 5 projects community activity is high, the chart patterns are at the bottom, with more room for development.
Concept
UniLend is a decentralized DeFi protocol that does not require permission and combines spot trading services & coin market with lending & borrowing service through smart contracts.
Team
The team's founder, CTO and CPO are all deep players in blockchain. They are from big companies like Matic Network, Vodafone, Amdocs, etc. They has also built partnerships with Ankr, Bluezelle, FXCoral, Probit Tokens and others.
Summary
Solve the pain points of the current DeFi market and improve the utilization of long-tail assets. Diversified team background. Recent trading volume has improved significantly, with early signs of rise.
3.1.2 RGT
Concept
Rari Capital calls itself the most powerful yield harvesting tool. It has one goal only, which is to safely earn the highest yield on stable assets.
Team
Rari Capital is a project co-founded by 3 college students, all with previous successful entrepreneurial experience and about 3 years of blockchain-related working experience.
Summary
Rari Capital community is very active, the Discord online rate is up to 15%. The coin holding addresses are relatively decentralized. The team is currently governed mainly by Dao, and RGT can be used to maintain governance: participate in voting on integrating new protocols, editing pool parameters, editing risk parameters, etc. The empowerment of Token is strong.
3.1.3 CVP
Concept
PowerPool is a protocol that provides a convenient solution for pooling governance tokens. With it, token holders can lend, pool, and borrow governance tokens in an Ethereum-based protocol to earn income and accumulate governance capacity. PowerPool's mission is to improve the utility of governance tokens to benefit all end users and provide a stronger, more powerful decision-making system for the DeFi ecosystem.
Team
The official website shows the core team of 6 people, the background of the team members is less revealed, no value reference, and the profile pictures are all pixel people.
Summary
In the early stages, most of the protocols were controlled by giant whales and faced the problem of voting participation. It is not easy to measure the "efficiency" problem of these governance tokens, and Power Pool solves this pain point by allowing small investors to lend the needed tokens on the Power Pool platform to increase their voting weight in the governance process and become a real force in the management of the protocol. It is more in line with the decentralized, fair and equal concept of DAO.
3.1.4 MIR
Concept
Mirror Protocol is a synthetic asset minting and trading platform. Synthetic tokens of stocks, futures, funds and other assets can be minted at Mirror Protocol.
Investors
In January 2021, Galaxy Digital led a $25,000,000 round in Terraform Labs, with other institutions including Coinbase Ventures, Arrington XRP Capital, Pantera Capital, Polychain Capital and others.
Summary
Mirror Protocol is the only project that introduces US stock assets and has a first-mover advantage. Compared with the track leader Synthetix, it has the advantages of low mortgage rate, cross-chain support, and richer assets. Mirror Protocol is the main project of Terra Ecology and Terraform Labs team, with a strong team and has attracted institutional investment, as well as having a good user base.
Concept
CREAM Finance is a decentralized lending and borrowing protocol for individuals and agreements to access financial services. The protocol is permissionless, transparent and non-regulated.
Competitors
Summary
In terms of TVL, CREAM is severely undervalued compared to DeFi's top projects (MKR, AAVE) and FOR with a similar market cap, CREAM has survived in this market despite repeated attacks, and the recent high-profile return of CREAM's founder to continue to lead the team in running the project has received a great response of community, which has caused CREAM to rise significantly recently. But in the long run, the price is still at the bottom.
A comprehensive assessment of the team, investors, community activity, TVL and other factors led to the following conclusions
DeFi plays an indispensable role in the crypto market. Looking back at DeFi's growth, we can see that 2020 can almost be described as the "Year of DeFi". 2020 was the year when the DeFi ecosystem started to release its huge development potential, and the main boost was the explosion of value in the lending and borrowing market. On the contrary, from the end of 2021 to now, the rise of secondary market in DeFi track is overshadowed by the light of GameFi. But in the long run, the TVL of the DeFi track is still steadily rising. Currently, from the chart pattern, the bottom adjustment has taken enough time and will perform very well if a new bull market opens.
Currently BTC is on a high after bouncing from the bottom and many altcoins are showing signs of rising. DeFi's leading projects will naturally follow BTC's rise, but there is limited room for growth. Many DeFi projects ranked relatively lower in market cap have shown signs of bottom absorption and can remain highly concerned.
The above content analysis is for reference information only and is not to be used as a basis for investment decision. Please do not make any investment decision based on this report.
Feel free to join Nowhere DAO for a discussion.