7 Quotes on the Highs and Lows of DeFi from Blockchain LeadersDeFi isn’t quite the powerhouse today it was a few weeks ago, but the ship is still sailing and more people are getting on board.
All aboard the DeFi Airship
- Crypto market data aggregator Dune Analytics showed the total number of unique DeFi user addresses is around 860,000, meaning it has increased by a factor of 10 times over the past year.
- Users increased by nearly 40% in October, from approximately 555,000 to 775,000.
- 85,000 users joined DeFi in the first 11 days of November, bringing the total growth up55% from the start of October.
Some turbulence, but still risingDecentralized autonomous organizations (DAOs) were heavily hit by October’s decentralized finance downtrend, with the total value of assets managed by DAOs crashing by 40% versus 30 days ago, according to data from DeepDAO. the combined assets under management controlled by DAOs was more than $290 million as of early October. By the second week of November, the AUM of DAOs had fallen more than 50% to tag $140 million.
As of this writing, DAOs currently manage $172.7 million in assets, with the total having increased by20% alongside the partial recovery posted by many top DeFi tokens over the past week. For the past two days, Bitcoin price has traded within the $14,800–$15,500 range, but the top digital asset has struggled to flip $15,500 to support.
Bitcoin has had some temporary setbacks but at 5 a.m. on November 12, BTC broke the $16,000 barrier.
While BTC price has vacillated, altcoins and some DeFi tokens have turned bullish. DeFi tokens including Yearn.finance’s YFI, Aave’s AAVE, Balancer’s BAL, and Uniswap’s UNI are all up significantly. YFI gained approximately 160% after dropping to$7,444 on Nov. 5, and in the past two days, AAVE rallied 175% from $25.87 to $70.91. Smaller tokens have also seen gains and Dune Analytics are showing more people are getting on board the DeFi Ship.
Asking the Experts…For those who have not already gotten onboard with DeFi, this time might cause some hesitation. Even as crypto (and BTC in particular) remains strong during a pandemic that is driving mainstream adoption, it’s clear that there has been an exuberant bubble of DeFi hype, but even as that hype dies down DeFi remains in an upward trajectory.
However, the future viability of DeFi projects is banking “bigtime” on the yet to be launched Ethereum 2.0 (Eth2) and the greater speeds and reduced costs that are promised along with the improved platform.
With equal parts fervor and trepidation from crypto enthusiasts, now is a good time to ask the experts in the space. Here are 7 quotes from notable names in blockchain, DeFi, and crypto investing:
“The DeFi revolution is here to stay. It offers the promise of a bankless world, where you don’t need permission to save or invest your money. Like any nascent technology, there will be times when it gets overhyped, but DeFi is real and it’s already working in the wild. This is just the beginning.” — Tyler Winklevoss, Co-Founder & CEO of Gemini exchange, Principal of Winklevoss Capital, and Olympian
“DeFi holds a promising future. We are also excited to see ETH2 launch, and we may even see more users go from BTC to ETH to acquire the 32 needed to stake.” — Jordan Anderson, COO at Bitbuy
“The DeFi boom was fast and furious over the past few months. Yield farming projects have cooled off and had their time in the limelight, but a lot of interesting infrastructure elements, such as borrowing and lending platforms, came out of the craze and will be everlasting. As always, Ethereum has the largest developer network and userbase so these products are predominantly ETH based. If ETH 2.0 brings significantly lower transaction costs then this would be welcomed since gas fees were extremely high and cost-prohibitive for the retail market to participate during the DeFi boom. The high gas costs affected our HedgeTrade (copy trade) platform as the smart contract execution costs went parabolic. We’re looking forward to ETH 2.0 ourselves and even looking at certain alternatives to our infrastructure to limit our dependency on fluctuating gas fees. “— David Waslen, Founder & CEO of HedgeTrade
“DeFi (fever) is currently like the previous ICO fever — but on steroids. Having said that it is an amazing technology and will deliver true access to both lending and credit without needing intermediaries to sanction anyone’s involvement. Core to its success will be the governance layer, which once stable, will dictate the membership of each project, aligning people with similar world views, risk appetite, and passions. — Jillian Godsil, Blockchain Chair, Keynote Speaker, Journalist, Broadcaster, and CEO and EIC of Blockleaders.
“DeFi gets rid of institutional middlemen. Instead, DeFi platforms directly match up liquidity providers and takers. Costs are low and incentives are aligned.” — Renato Leonard Capelj, Founder of Physik Invest and fintech reporter for Benzinga
“I am excited for ETH2.0! I love seeing improvements and innovation in the space, I will be staking once the conversion is complete. As far and the speed and costs, they claim the “system” will be faster and more affordable as eth costs can get a little ridiculous at the time. I'm hoping the improvements will solve the current issues if they are not the ecosystem could have serious repercussions and many erc20 projects will fail. Let us play to Vitalik that we have a seamless launch in December.” — Crypto Wendy-O, on-air host of CryptoWendy-O, Crypto Event Host, and Marketing Consultant
“DeFi is giving power to the people by helping the unbanked and underserved have the opportunity to quickly have access to capital through microloans.” — Richard Carthon, Host of CryptoCurrent
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In this line up of opinions by the leaders who are watching, investing in, and running DeFi projects, you can hear the concerns but just barely above the din of their enthusiasm.
It is worth noting that many parts of DeFi remain untested. A failure in smart contracts would cause huge turbulence for DeFi as would any delay in Eth2.
However, DeFi is continuing the work that Bitcoin started — independent, decentralized finance, but moving well beyond the function of Bitcoin to provide reliable transfer and holding of value, to a whole world of use cases that make investors who want independence and decentralization in finance excited by the possibilities.
Like any airship, built on a dream, a few visionary ideas, and a great deal of collective belief, DeFi on Ethereum in its current iteration could still crash and burn. But if it does, the community will build it again and these use cases — enabling lending, betting, insurance, and a variety of things users need and want from finance — will become an enduring reality in a world that has recently had a hard lesson in the potential unreliability of the state and still looming uncertainty of our global economic situation.