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Aave (LEND) and Synthetix (SNX) on the uptrend: DeFi rally without end?

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2 years ago

Decentralized Finance (DeFi) is one of the hottest topics in the crypto world. While many of these projects are controversial, especially with regard to the relationship between opportunities and risks, the majority of DeFi tokens can undoubtedly shine with strong performances. In this article, we want to look at the recent gains from Aave (LEND) and Synthetix (SNX).

DeFi Token on the upswing while BTC stagnates

This morning we already reported on Bitcoin , stocks and precious metals in our market update . One finding was that the volatility of BTC is currently at a low level. At the same time, the trading volume has also dropped in recent days.

So while Bitcoin is stagnating from a price perspective, the interest of many investors is shifting towards decentralized finance . The high volatility of some tokens paired with the possibility of yield farming attracts many who are looking for the quick penny.

The focus today is on the two DeFi Token Aave (LEND) and Synthethix Network (SNX). They have clearly outperformed in the past seven days. For a short time, there was even a "flipping" in which the two tokens overtook MakerDAO (MKR).

Aave (LEND) and Synthethix (SNX) with outperformance

A good example of outperformance is the chart below. SNX has risen in the last 7 days from initially $ 2.40 to a current market value of around $ 3.80.

LEND is also considered a clear outperformer. The following chart shows the price performance since 01/01/2020:

The growth curve of Lend already shows the danger of DeFi. While the majority of these tokens were still relatively quiet at the beginning of the year, interest exploded, and with them the prices about 2-3 months ago. It should also be clear that this is explosive and not exactly sustainable growth. In this respect, every interested party should first deal intensively with the respective DeFi project and not trust blind promises, as was the case, for example, during the ICO Hype in 2017.

While decentralized finance is undoubtedly an exciting topic, some tokens are currently at risk of being overvalued. At LEND, for example, the opposite is the sustainable idea for many investors. Because whoever owns the token receives voting rights that can be of great value if the development is positive in the long term. But here too, of course, there is a speculative thought.

What do you think of the recent gains from Aave and Synthetix? - Do you see the danger of overheating or is decentralized finance still at the beginning of a long development?

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Written by   20
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