New UNI recipients started to sell their tokens en masse, causing UNI’s price to drop from a high of close to $7 to a low of less than $2. But soon after, the bubble began to burst. Because of its sudden launch, UNI almost immediately catapulted DeFi market cap to a new all-time high. UNI was launched as an airdrop that rewarded previous Uniswap users and liquidity providers. Uniswap trading volume increased from about $1M a day in early June to close to $1B a day in the beginning of September. Uniswap allows anyone to create a new token pair and immediately begin trading using decentralized liquidity pools, which helped new DeFi tokens launch and scale quickly. Uniswap, the largest Ethereum-based decentralized exchange, has been the engine behind DeFi mania. YFI reached a market cap of over $1B by the end of August.ĭeFi market cap peaked on September 18th shortly after the launch of Uniswap’s UNI governance token. ![]() YFI was launched through incentivized liquidity pools which has become a popular way of launching DeFi tokens. Yearn.finance, an application that automatically invests user’s funds into the highest yielding decentralized lending markets, launched the YFI governance token in mid-July. Aave originally launched the LEND token, which they recently transitioned to the AAVE token.įollowing COMP many other DeFi applications launched governance tokens during the summer of 2020. In addition to Compound, Aave protocol has grown to be one of the largest DeFi decentralized lending platforms. It also lets users lend their cryptoassets and earn yield, which has become a cornerstone of DeFi investing. Compound lets users borrow cryptoassets like ETH, DAI, and USDC using crypto as collateral. COMP’s launch kickstarted the rise of decentralized lending and borrowing, which served as the initial fuel for DeFi’s surge. But the initial DeFi surge was dwarfed by this summer’s run, which saw the rapid entry of many new projects.ĭeFi’s recent rise began in earnest in June with the launch of Compound protocol’s COMP governance token. During 2018 early projects like MakerDAO (MKR) and 0x (ZRX) pushed the total DeFi market cap to over $5B, as Ether (ETH) price reached all-time highs. DeFi’s Third ActĪlthough it may seem like it popped up overnight, DeFi has been around for years. You can check out our DeFi data and recreate many of the charts featured in this piece using our free community charting tool. In this week’s Feature, we explore the rapid rise of DeFi tokens and the current state of DeFi’s market cap and usage. ![]() But it cooled off after September, and has taken a back seat to BTC and ETH since. Decentralized finance (DeFi) took over the crypto world during the summer.
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