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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. 

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Ser Suzuki Shillsalot has 8 years of experience working as a Senior Investigative journalist at The SpamBot Times. He completed a two-hour course in journalism from a popular YouTube video and was one of the few to give it a positive rating. Shillsalot's writings mainly focus on shilling his favourite cryptos and trolling anyone who disagrees with him. P.S - There is a slight possibility the profile pic is AI-generated. You see, this account is primarily used by our freelancer writers and they wish to remain anonymous. Wait, are they Satoshi? :/

Disclaimer: AMBCrypto's content is meant to be informational in nature and should not be interpreted as investment advice. Trading, buying or selling cryptocurrencies should be considered a high-risk investment and every reader is advised to do their own research before making any decisions.