Bitcoin is breaking one all-time high after another, while Decentralized Finance (DeFi) underperformed this week. Even so, there were two DeFi projects that put Bitcoin in the shade.
The crypto market can look back on a historic week and investors were also able to set new records in the DeFi sector. Not only Bitcoin has reached a new all-time high. The Total Value Locked Indicator, which shows all capital tied up in DeFi protocols, has reached a new record high.
DeFi protocols currently manage nearly 16 billion US dollars, which is about the current market capitalization of companies like PUMA, LG Electronics, or the Italian bank UniCredit corresponds. Even though some decentralized finance token courses saw huge increases this week, the DeFi Pulse Index (DPI) could not outperform Bitcoin and Ethereum.
Nevertheless, the “ETF token” DPI rose by 15.13 percent in the last seven days at the time of going to press.
While Bitcoin is up over 20 percent this week, top DeFi giants like YFI, UNI, and AAVE are only up five to ten percent. However, this may primarily be due to the fact that these tokens already recorded enormous price increases in late November and early December. Decentralized finance was one of the first sectors to recover from the lows in the altcoin market in early November.
Two DeFi tokens even performed better than Bitcoin. SushiSwap (SUSHI) was one of the big winners in December. In the last seven days alone the price rose by 25.1 percent, and on a monthly basis, SUSHI was able to gain 100.2 percent. What was that about?
- Yearn.Finance merges with SushiSwap. The partnership enables the teams behind the two projects to realize synergies. Together they are working on the major Deriswap project — an all-in-one platform for lending, token exchange, and derivatives trading.
- SUSHI also announced the release of its “ BentoBox” at. This should enable traders to open short and long positions on the decentralized SushiSwap exchange.
- Finally, the co-founder 0xMaki this week indicated that SushiSwap will soon also be available on Polkadot. Polkadot is currently one of the fastest-growing smart contract platforms.
All this news seems to have spurred the DeFi token over the past few weeks.
Another decentralized finance winner last week is called Bancor Network (BNT). Bancor is a decentralized exchange (DEX) that existed before the term DeFi was established. The project has been around since 2017 and can therefore be described as the old hand of DeFi-Space. BNT is up over 40 percent in the past week and is trading at $ 1.41 at press time.
Just like UniSwap and SushiSwap, Bancor is a decentralized exchange. But the project takes a different approach and wants to tackle the problem of impermanent loss (IL) has been solved with a new method.
Bancor is not exclusively based on the market price but uses price oracles to reduce arbitrage trading, which leads to IL. It also uses a new token model to minimize the loss caused by IL. The Head of Growth at Bancor Network, Nate Hindman, explains in a blog post how the system works in detail.
Just yesterday, Coinbase announced that it would go public in the US. In addition, this week the crypto firm listed some DeFi tokens , which included BNT. In addition to BNT, Synthetix (SNX) and Aaave (AAVE) have been added to Coinbase Pro and are now tradable. As a result of the listing, all three DeFi tokens posted price increases.
The listing of the tokens can be seen as a great success for the DeFi sector. Compared to many other crypto exchanges, Coinbase is known for its high regulatory standards and gives the emerging Ethereum sector more legitimacy.
While Bitcoin has outperformed much of the DeFi sector this week, the DeFi market should be kept an eye on.
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