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November 29, 2022
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Guide & Analysis

DeFi Tokens are hit hard as crypto market correction continues

The cryptocurrencies that fuel decentralized financial projects have depreciated more than Bitcoin and Ethereum.

DeFi Tokens are hit hard as the crypto market correction continues today. DeFi is a growing sector that offers traditional financial services such as loans and financing, but without a centralized entity such as an excchange or brokerage.

Blue-chip projects like Aave, uniswap, Chainlink and Terra all lost 20% or more of their overnight value, according to CoinGecko, falling more than market leaders in Bitcoin or Ethereum.

Just over 24 hours ago, the global cryptocurrency market looked optimistic.

Bitcoin was hovering at a price of $52,774, while Ethereum reached $40 of recapturing the $4,000 limit. Then disaster happened yesterday morning.

El Salvador gave currency to Bitcoin yesterday, but it didn’t have the effect optimistic crypto fans had hoped for.

There was a rapid 13% drop in crypto’s total market capitalization, followed by losses of 11% and 15% with Bitcoin and Ethereum, respectively, in a matter of hours.

As steep as they are, these losses are not as severe as those experienced by DeFi token holders today.

Chainlink, an Ethereum-based oracle network that provides on-chain data for smart contracts, has been reduced in value by 16.4% in the past 24 hours. It is currently worth $27.13 at the time this article was written.

Uniswap, the token that powers the popular decentralized exchange of the same name, scored 14.7 percent overnight. It currently trades for $22.77. More bad news for the DeFi project, which is also being investigated by the US Securities and Exchange Commission (SEC).

The Aave decentralized loan protocol also dropped 12.5%. Aave is currently worth $315 at the time of writing.

Elsewhere in the top ten DeFi tokens by market capitalization, the Pancake Swap lost 17.4% of its value overnight to $19,222, while the Terra depreciated 8.3% to land at $27.06 .

With the market capitalization of the global cryptocurrency market  currently down nearly 10%, the near-ubiquitous double-digit losses among DeFi tokens show that this sector has been hit hard by the current fix.

Source: Decrypt

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