Hardcore Decentral Finance (DeFi) supporters awoke today to a long-awaited sight of Coingecko’s top 100 rankings by market capitalization: Native tokens for the popular DeFi platforms Synthetix and Aave have crept into the top 20, an event that DeFi observers as “The Great Repricing. “
DeFi investors, users and builders have long argued that compared to other cryptocurrency projects, given DeFi’s growing user base, cash flow from protocol fees, and increased activity compared to scattered Layer 1 networks, the large sector is the “zombie Chain “is severely undervalued in the top of its market cap.
Aave and Synthetix broke the top 20, overtaking Tezos and Tron in market cap.
Do you remember “The Great DeFi Repricing” I’ve been ranting about for months? Yes it happens.
Soon the top 10 will be ETH, BTC and DeFi.
– eric.eth (@econoar) January 16, 2021
If the past week is any sign of this, it seems the broader market has finally woken up to the mismatches. SNX and AAVE are up 40% and 74%, respectively, weekly. Both are over $ 2.3 billion due to market capitalization, outperforming Layer 1 companies like Tezos and Tron.
$ AAVE now have a higher market cap than $ TRX and $ XTZ, according to @coingecko.
I’ve maintained this view since late 2019 that the top DeFi crypto will gradually overtake this old layer 1 coin from mcap.
– Arthur on Tech (@ Arthur_0x) January 16, 2021
The steps follow promising developments for both projects. Aave has a proposal in the works that, if approved by the government, will modify the $ 370 million security module to potentially create an entirely new line of insurance products, while Synthetix will introduce a Layer 2 scaling solution was supported.
In addition, some think that this could only be the beginning for DeFi assets when a new “Alt Szn” begins.
(17/27) Even if no new money enters the room, we see this revaluation being corrected by the market as the money flows towards the only vertical in crypto showing signs of an adjustment in the product market
It will be a bumpy ride, however, as you cannot have a massive uptrend without volatility
– José Maria Macedo (@ZeMariaMacedo) September 9, 2020
“While this is an important milestone, it is just the beginning of a trend that we have been talking about for a while,” said José Macedo, partner at Delphi Digital, in an interview with Cointelegraph. “[…] In terms of where this leads, the TAM for consumer finance is $ 3.2 billion. We see the added value for DeFi in funding what the internet has done with data. Converting financial primitives into “Money Legos” and creating an open ecosystem that enables permissive innovations throughout the stack. ”
It’s a long-term view that could bring achievements like reaching the top 20 through cryptocurrency rankings, but Macedo warns that the path to achieving such high goals is not necessarily a smooth one:
While the general direction is clear, keep in mind that without volatility you cannot achieve a massive uptrend. We are undoubtedly facing a bumpy ride as regulation is great and DeFi is declared dead many times over.