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Assessing reasons for a profitable DeFi industry despite the ongoing crypto winter 

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The ongoing crytpo winter has led to investors bearing severe losses in the industry. However, the decentralized finance (DeFi) sector is showing positive returns for investors. Furthermore, the returns also managed to show how mature the DeFi market is becoming.

According to a fresh analysis created by Bolide Finance on 4 October, four distinct yield aggregators recorded returns of 2.87% on average between January and July 2022.

Profitable returns against the crypto winter

Acryptos had the best returns within the aforementioned time frame, averaging 6.4%, with a profit apex in January of 12.55%. Autofam (1.2%), Beefy Finance (3.75%), and Killswitch (0.17%) were the other three yield aggregators with positive average returns between January and July.

With an average return of 265.12%, PancakeSwap managed to beat rival platforms in other areas of under-farming. It’s interesting to note that platform investors experienced the biggest gains in April, at 318.08%. At the same time, Elipse ranked third with 25.4% gains, followed by Index at 25.7%, and Biswasp at 28.94% for the first Decentralized Exchange (DEX) on the BNB Chain. Returns of 0.77% were recorded by Nomiswap.

According to CoinGecko, the decentralized oracle technology Chainlink and its native LINK token increased by around 8% during the last 24 hours. The cryptocurrency had a market capitalization of more than $3.7 billion and was trading at $7.65 on 4 October. The DeFi industry uses Chainlink’s oracles to give pricing information to various initiatives.

Beyond cryptocurrency oracles and price feeds, the hugely popular liquid staking technology Lido Finance also experienced a bullish surge. The native governance token of the project, LDO, increased more than 7% in the last 24 hours. Voting on various project improvement suggestions was done with the LDO token.

After a significant run-up, LDO was trading at $1.57, but according to CoinGecko, the token was still about 80% behind its all-time high, which was $7.3 in August 2021.

What to expect in the crypto winter?

The fundamental technology of DeFi was not greatly advanced by most projects that contributed to the euphoria that preceded the current market meltdown. They used tokenomics with excessive debt so they could focus on generating cash flow.

Therefore, it makes sense to assume that during a bear market, protocols centered on hype and profit were most likely to fail. However, initiatives centered on generating genuine user value were more likely to survive the crypto winter. 


Saman Waris works as a News Editor at AMBCrypto. She has always been fascinated by how the tides of finance and technology shape communities across demographics. Cryptocurrencies are of particular interest to Saman, with much of her writing centered around understanding how ideas like Momentum and Greater Fool theories apply to altcoins, specifically, memecoins. A graduate in history, Saman worked the sports beat before diving into crypto. Prior to joining AMBCrypto 2 years ago, Saman was a News Editor at Sportskeeda. This was preceded by her stint as Editor-in-Chief at EssentiallySports.
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