While Ethereum’s price is leading the current rally of altcoins this season, it is likely that the easy part of DeFi will be over soon. New farming projects’ TVL has surged up to $100 Million and several projects have launched improved forks that were expected to take days to months.
This has brought DeFi to emerging markets and retail traders looking for the next big mover like ETH and BNB. Legacy finance has hit DeFi as well, though it is likely to take 5-10 years for it to go mainstream, there are institutions capitalizing on DeFi’s trillion-dollar opportunities. Based on DeFi’s TVL and price action of top tokens like UNI, LINK, SUSHI, WBTC, LUNA, CAKE and AAVE, there is a more structured and rigorous building process underway.
Building further on such projects and offering higher returns to traders will require intentional HODLing, stacking, higher trade volume, and volatility in the coming weeks. In the past week, Bakery Swap (+385%), Venus (+70%), Fantom (+50%), MKR (+29%) and Avalanche (+24%) offered the highest returns to traders.
The TVL has increased consistently for projects in the top 10 and more Bitcoin is wrapped in DeFi than the previous quarter based on data from DeFipulse.com. ROI offered currently on most projects is significant in the short term. There are few DeFi tokens offering long-term returns, however, in the current bull run, there are projects that have emerged as profitable when YTD returns are considered. This makes the road ahead for DeFi heavily rely on a few projects and that signals dominance.
There are a bunch of untapped opportunities in DeFi that are expected to change the entire landscape. One such opportunity is options, it has been largely untapped and hasn’t successfully transferred over to DeFi, despite being one of the largest markets with the biggest upside.
With a combined market capitalization of $133 Billion, the top 100 DeFi tokens are likely to continue rallying and offering an opportunity to the options market. A few DeFi projects have faced the challenge of poor UX and low usability, however, most projects are scalable, offer smooth UX and decentralization. Unlike altcoins and projects on BSC, there are very few ghost chains on the DeFi network.