Start Your Tractors: The Farmer Almanac of Decentralized Financing (DeFi) indicates that DeFi Summer 2.0 could bring some healthy yields across the ecosystem.
Multiple common metrics used to gauge the health of the DeFi space point to an impending bull market, but perhaps the most promising of all is Curve’s surge in the $ CRV governance token price.
Curve is often referred to as one of DeFi’s ‘backbone’ protocols and is an essential tool for many retail and protocol level yield growing strategies. Curve allows for low-cost, low-slippage swaps of comparable assets – for example, swapping between different stablecoins such as DAI, USDC and USDT – and users who deposit liquidity into the Curve pools receive transaction fees and CRV governance token issues as a reward.
As a result, the protocol is the 7th largest by total value locked (TVL) per DeFiLlama with $ 6.49 billion in assets, and functions as the primary revenue-carrying protocol used by revenue vaults such as Yearn.Finance.
To remember $ CRV is the underlying return on so many defi:
All proceeds are about to be staged across dozens of protocols of strength $ CRV price.
I think we’ll have a good few weeks soon.
– Cryptoyieldinfo (@Cryptoyieldinfo) January 17, 2021
Reading stars, testing the ground
If the price of CRV can be used as an indication of how much common agricultural strategies will perform in the coming months, then summer looks bright green.
CRV is up 4.6% to $ 3.94 as of today – as part of a month-long rally that took it 51.1% higher, according to Coingecko.
Part of the rally is fueled by CRV’s tokenomics. CRV holders have the option to lock their tokens for a period of 4 years in exchange for veCRV, giving them access to additional protocol fees and higher returns. Likewise, like the rest of DeFi rallies, as a top protocol CRV prices should also rise upwards.
However, holders of veCRV have also been the recipients of a number of lucrative airdrops lately. Ellipsis, an “authorized fork” from Curve on Binance Smart Chain (copying the protocol to the frontend, reminiscent of Windows 98), has broadcast a first round of $ EPS tokens to veCRV holders. Likewise, Convex Finance, an upcoming platform aiming to “simplify stakeout on Curve,” has also announced an airdrop for veCRV holders, although details of the drop have not yet been released.
Airdrops can often be a tricky affair. Protocols aim to attract governance token holders who are loyal to the project and provide informed votes. While this means in many cases that it must be distributed to previously and often protocol-related portfolios, with new projects building on the back of others, distribution parameters may instead be intended to serve a particularly knowledgeable community. to pull – and veCRV holders fit the bill.
Ultimately, it has the potential to create a positive cycle for all of DeFi: speculators buy CRV to convert to veCRV in hopes of receiving an airdrop; CRV’s price is rising; DeFi’s revenues are getting thicker.
Plenty of good news
With CRV’s fate and the strategies that depend on it for yield play out, a host of other statistics point to a strong summer for DeFi.
DeFi’s TVL figure is currently at $ 123.29 billion, after rising another $ 20 billion after crossing the $ 100 billion mark last week. Even as the broader market retreats after an exceptionally strong Thursday, multiple DeFi projects remain green on a daily and weekly basis, such as Curve and Compound, and OG projects such as Maker are on a crack, taking the MKR token $ 4,000 for the first time yesterday darkened. .
The wave has several observers praying for a “DeFi Summer 2.0”. While a handful of DeFi Gen 2 token surpassed it throughout the winter and spring, the industry appears to be the recipient of a strong rotation towards older, established projects. Last summer, space took off, but was also marred by a wave of hacks and exploits.
DeFi Summer II: Electric Boogaloo
– Jason Choi (@mrjasonchoi) April 15, 2021
Ultimately, however, the biggest sign in the stars for DeFi (as well as the larger market) is the execution of a joke: Dogecoin.
Hungry for blood, the meme currency overshadows the five-digit gain for the year by 12,600%. Traditionally, when the Shiba Inu runs, other altcoins follow – another bubble points to a bumper DeFi pick.
Remember the coolest part about it $ DOG pumping is that the money always ends up in other alts when it is finished.
– KALEO (@CryptoKaleo) April 16, 2021