Up by 48%, should the DeFi Pulse Index thank UNI instead
The DeFi Pulse Index (DPI) is a Decentralized Finance assets index that tracks the underlying tokens’ performance. Based on the changes noted in these DeFi tokens, the value of the DPI is set. This, surprisingly, hasn’t strayed much from the broader market trend.
The DeFi Pulse Index
The DPI fell victim to the broader market’s cues and was subjected to a 48% drawdown in value when its trading price was slashed in half from $106 to $55.
However, over the last few days, it has managed to recover pretty much all these losses, with the same valued at $82.25.
Since the DPI is based on the changes in its underlying tokens, it’s essential to take these 14 assets into consideration as well.
These 14 cryptocurrencies include Uniswap, AAVE, Maker DAO, Loopring, Synthetix, Compound, Yearn.Finance, SushiSwap, KNC, REN, Balancer, BadgerDAO, Harvest Protocol, and Rari Capital.
Out of them, the highest weightage is held by Uniswap. UNI managed to undo all the losses it endured this month, with the alt now busy tackling the crash in May.
Changing hands at $5.57 at press time, UNI, at its peak, managed to register a hike of 62.39% starting 19 June. The DEX token has effectively invalidated the 30% crash seen this month. Now, it is on the verge of doing the same with May’s 41.35% drawdown.
The reason why Uniswap will always have a higher weightage than other DeFi assets is that Uniswap is more than just a DeFi token.
Being a Decentralized Exchange enables Uniswap to stay afloat and grow further, irrespective of market conditions. Especially since it is not dependent on the active or prevailing trend.
Even today, Uniswap single-handedly dominates almost 60% of the entire weekly volume generated in the DEX market. Plus, with investors conducting transactions worth over $18.5 billion, UNI’s rise seems unceasing for now.
By extension, this will benefit DPI as well and would push its rally further beyond 62% by the end of the second quarter.