DeFi Market Faced a 15% Drop in August: VanEck’s Report

The DeFi, Decentralized Finance ecosystem experienced a challenging month in August, with exchange volume dropping by 15.5% to $52.8 billion. According to information from investment company VanEck, the value of some of the most well-known DeFi coins has decreased, which has mostly contributed to this loss.

VanEck’s analysis highlights the impact of global interest rates, particularly in the United States, on stablecoins, and its market capitalization fell to $119.5 billion, a 2% decrease. Moreover, Investors are seeking about 5% risk-free yields in money market funds due to this fall, which is related to rising traditional finance interest rates.

The ecosystem’s various components, including indicators like exchange activity and TVL, all demonstrate this downward trend, and TVL decreased, with an 8% fall, lowering it to $37.5 billion. Exchange volume significantly reduced by 15.5% to $52.6 billion, and Egorov transferred 39.25 million CRV tokens to DeFi investors.

VanEck’s MarketVector Decentralized Finance Leaders Index (MVDFLE) data monitors the performance of the DeFi ecosystem. Many significant coins, including UNI from Uniswap, LDO from Lido DAO, MKR from Maker, AAVE from Aave, RUNE from THORChain, and CRV from Curve DAO, had significant drops, affecting the market’s condition.

DeFi Index Lags Behind Bitcoin and Ether

According to the research, the DeFi index significantly underperformed by 21% compared to Bitcoin and Ether in August. The problem got worse as the value of the UNI token fell by 33.5%, which led investors to sell for profits from the prior month’s market condition.

The stablecoin crvUSD from Curve Finance grew substantially after recovering from a serious security breach in late July, reaching an unusual peak of $114 million in borrowed funds. To secure loans in crvUSD, users must offer collateral, often in the form of ETH. CrvUSD is pegged to the U.S. dollar and functions through a CDP structure.

According to the research, crvUSD’s growth led it to a significant source of platform income, leading charges from all non-mainnet liquidity pools in three of the previous four weeks. So, the governance token from Curve Finance has had trouble recovering after the security compromise, with its value falling by 24% to $0.45.

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