AAVE and SNX Surge Dramatically, Initiating New Prospects in DeFi
There is a decreasing trend for 4 consecutive days in the crypto community, and the price of Bitcoin has fallen from a maximum of $41,900 to $30,408, a drop of nearly 27%. The scale of the cryptocurrency market has shrunk extremely, from $1.1 trillion to $850.3 billion, and now it has rebounded to around $940 billion.
At present, as the top bitcoin, there is no sign of stabilization, especially when the Chinese New Year is approaching, the “Chinese New Year cash-out” curse casts a shadow on the short-term trend of Bitcoin.
However, with the sudden emergence of DeFi in 2020, some popular tokens are the first to get rid of the drag of Bitcoin and usher in the sound market.
Source: QKL123
The decentralized lending leader AAVE and the synthetic asset leader SNX both hit new highs on Jan. 13. In addition, the layer2 concept coin INJ also hit a record high. The storage concept coin AR, the insurance project WNXM, and the decentralized asset management protocol token MLN all set a new high in the past 30 days.
The DeFi craze in the summer of 2020 allowed more people to focus on DeFi projects. In that crazy summer, countless DeFi governance tokens emerged, and these tokens have experienced amazing short-term growth. Many people relied on liquidity mining and yield farming to make a lot of money.
However, last October, DeFi gained less popularity, and the profitability of countless homogeneous liquid mining projects plummeted. It was no longer difficult to stimulate the adrenaline of “farmers”.
As the tide receded, most of the projects disappeared and faded out of sight. Some high-quality DeFi projects that have withstood market tests have been retained and continue to be enthusiastically received by funds. Decentralized lending leader AAVE and synthetic asset leader SNX are included in it.
AAVE is the conversion of the decentralized lending platform LEND (later renamed AAVE), the governance token Lend. At the beginning of 2020, the price of Lend was about $0.01. On October 3, 2020, LEND was converted to AAVE at a ratio of 100:1. Today, the price of AAVE is $140.89, which is more than 130 times higher than the beginning of 2020!
Source: CoinMarketCap
SNX is the Synthetix protocol token of the decentralized on-chain derivatives trading platform. Synthetix’s predecessor was the decentralized stablecoin project havven. At the end of 2018, the Synthetix team realized that this system has the potential to launch multiple assets, including synthetic cryptocurrencies (long and short), indexes, and stocks. As such, they switched directions in time and made efforts to decentralize on-chain derivatives trading. At the beginning of 2020, the price of SNX is $1.2, and the current price is $14.94, an increase of more than 12 times.
Source: CoinMarketCap
Strong fundamentals support
Since the emergence of Bitcoin, it has almost been burdened with the reputation of “scam” and “tulip bubble” for 12 years. However, the situation has changed in 2021. Mainstream media that regard Bitcoin as a scam have almost disappeared. But for DeFi, not only outsiders but even most community members still maintain a “bearish” mentality, considering it is a short-term hype.
However, if you think over and observe these DeFi products (many people like to call them “protocols”), you will find that the data growth curves of many products are so charming.
The number of users is the most intuitive indicator.
Source: Dune Analytics
This picture is a total view reflecting the current number of users in DeFi projects. It can be seen that more than 12 million people are using DeFi projects. The exponential curve indicates that users are in a high growth stage. (Note: the “number of users” here refers to Ethereum addresses. Since users can have multiple addresses, this number is overestimated.)
Among them, there are 35,000 users who use AAVE, and the number of users who use Synthetix is slightly less, only accounting for 13,000. Generally speaking, although the number of users of the two is not large, the curves are all exponential, and the development prospects are very optimistic.
Source: Dune Analytics
Source: Dune Analytics
The value locked represents how much real money users are willing to invest in your project. According to Debank’s data, Synthetix and Aave are ranked 4th and 5th in the amount of DeFi value locked, and the market value exceeds $2 billion.
Source: Debank
Both Synthetix and Aave’s locked value volume have gone through the process of latency, awakening, craze, disillusionment, and value review. Moreover, after the value gains, the locked value volume continues to rise, indicating that investors are still optimistic about the project after the market test, and the prospects are optimistic.
Revenue refers to all the fees paid by users when using the project. According to Token Terminal data, Synthetix and Aave both have annual revenues of more than $50 million, ranking fourth and fifth in the DeFi market respectively.
Source: Token Terminal
At present, the market cap of Aave exceeds $1.7 billion while SNX exceeds $2.1 billion. Both market capitalization ranks among the top 20 in the entire cryptocurrency market.
Regarding the huge gains between the two on Jan. 13, some investors have come to realize, “Aave was 100 times last year and N times this year. If you bought 100,000 yuan (roughly $15,444) at a low point, you will now boast almost 100 million yuan (nearly $15,444,015)!”
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Originally published at https://en.icointime.com on January 14, 2021.
