HomeLatest NewsTrouble for DeFi tokens as market drops 25%

Trouble for DeFi tokens as market drops 25%

Top DeFi tokens have declined by 25% in seven days to see total market cap reduced to $10.2 billion

A large number of the leading tokens by market cap in the decentralized finance (DeFi) market have sunk by more than 20% in the past seven days — led by Yearn.finance, Sushiswap (SUSHI) and Aave and Uniswap.

The sharp decline experienced by the top tokens over the past day has seen the total market capitalization of the sector shrink by more than 25%.

According to on-chain data and social sentiment tracking firm Santiment, the DeFi space has seen an overall decline in trade volumes.

In its October 7 blog post the firm noted:

“The crypto market has been engulfed in a sea of red this week, with most DeFi blue chips recording double-digit losses over the past seven days.”

“Our data indicates that the collective market cap of all DeFi-related assets has shrunk by 25.1% yesterday alone, with daily trading volumes down by a combined 30.2%. $COMP, $YFII, $YFI and $SUSHI are among those in the wreckage…,” the firm added in a tweet posted on October 8.

Total market cap of all DeFi-related assets stands at around $10.2 billion, according to data from market aggregator CoinMarketCap. The figure represents just a fraction (under 3.5%) of the global cryptocurrency market capitalization that the platform estimates to be about $333 billion as of writing.

In terms of daily trading volume, the sector has seen just over $3 billion worth of trades in the past 24 hours.

Most of the top DeFi tokens have crashed double digits over the past seven days. Source: Santiment

Another top DeFi token that has lost out in this period is Uniswap (UNI). The recently launched governance token on the largest decentralized exchange (DEX) has tanked by nearly 40%.

Meanwhile, yearn.finance (YFI) looks like it will break below $12,000 after dropping nearly 50% over the past week — the token retraced overnight by almost 20% to trade around $12,500.

At the time of writing, UMA has dropped 32%, Aave 23%, Maker 14% and the Synthetix Network by over 22% in the past seven days, according to data from CoinMarketCap.

However, despite these losses, Santiment points to the “all-time low MVRV’s” for most of the tokens as an indicator that they are currently largely undervalued. MVRV stands for ‘market value-to-realized value’ ratio.

The firm has also looked at the increased “whale accumulation” among projects; suggesting “DeFi death” talk could be a little premature.

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