DeFi

On September 7, decentralized financial (Defi) tokens such as Lido DAO, Nexo, Curve DAO Token, Compound, and Yearn Finance became the cryptocurrency market’s top losers. In a single day, the tokens fell by 9%-17%. One of the most popular places to look for the day’s cryptocurrency losses is the Coinmarketcap top losers list.

DeFi Activity is On The Decline

According to DefiLlama statistics, the total value locked (TVL) for all decentralized finance (DeFi) protocols held within various chains was $57.53 billion. Due to the general downturn in the cryptocurrency market, the TVL within the DeFi ecosystem has decreased by 65%.

defillama

Total Value Locked – Source: defillama

The Ethereum chain has the highest TVL of any network in the DeFi ecosystem. However, it has dropped by more than 185% in the last nine months. Daily active users of Ethereum chain DEXes have decreased, as has daily trading volume. It is possible to anticipate further income losses due to the ongoing expansion of Layer 2 scaling solutions and a steady decrease in the number of transactions handled on Ethereum.

Now Let’s have a quick look at DeFi coins.

Lido DAO Price Update & Outlook

The current Lido DAO price is $2.04, and the 24-hour trading volume is $120 million. Despite a dip in DeFi total value locked, Lido DAO has increased by 8.51% in the previous 24 hours. CoinMarketCap now ranks #64 with a live market cap of $637,984,840. It has a circulating supply of 312,951,154 LDO coins and a maximum supply of 312,951,154 along with 1,000,000,000 LDO coins.

LDO

LDO will likely gain immediate support at $1.70; a break under this can drive a selling trend until the next support level of $1.57. A bullish breakout of $2 can expose LDO prices to $2.25 or $2.65.

NEXO Slides Price Update & Outlook

Nexo’s current price is $0.884164, with a 24-hour trading volume of $16 million. Nexo has fallen by 0.83% in the previous 24 hours. CoinMarketCap now ranks #72 with a live market cap of $495 million. There are 560,000,011 NEXO coins in circulation, with a maximum supply of 1,000,000,000 NEXO coins.

NEXO

The NEXO/USD pair has violated the upward trendline at $0.93. Now the 50-day exponential moving average and the double bottom pattern extend support at the $0.83 level. Further selling pressure can also push NEXO’s price towards the $0.70 support level.

On the higher side, NEXO will likely gain immediate resistance at the $1.10 and $1.20 levels. Additional demand can also slice through the $1.10 resistance and lead the NEXO price towards $1.25.

Curve DAO Token Price Update & Outlook

DAO Token is now trading at $1.09 with a 24-hour trading volume of $112 million. Curve DAO Token has increased by 4.33% in the previous 24 hours. With a live market cap of $575 million, CoinMarketCap now ranks #68. There are 528,064,344 CRV coins in circulation, with a maximum supply of 3,303,030,299 CRV coins.

DAO

The DAO/USD pair is consolidating in a narrow trading range between $0.99 and $1.23. A breakout of this trading range will determine further trends in the DAO coin.

On the lower side, DAO’s immediate resistance stays at the $0.87 level, whereas a breakout of the $1.233 level can lead the coin’s price towards the $1.47 level.

The MACD and RSI are tossing in the buying and selling zone as the market lacks volatility.

Compound Price Update & Outlook

The current price of the Compound is $46.87, with a 24-hour trading volume of $29 million. The Compound has increased by 2.14% in the last 24 hours. CoinMarketCap now ranks #97, with a live market cap of $339 million. There are 7,232,572 COMP coins in circulation, with a maximum supply of 10,000,000.

COMP

On the daily timeframe, the triple bottom pattern supports the COMP coin at the $43.73 level and a breakout on the lower side exposes the COMP coin towards the next support level of $29.30. Since the COMP/USD pair is trading under the 50-day exponential moving average, it’s adding selling pressure.

Let’s consider taking a selling trade upon a breakout of the $43.75 level.

Yearn.Finance Price Update & Outlook

The current price of yearn.finance is $9,388.17, with a 24-hour trading volume of $64 million. Yearn.finance has increased by 6.15% in the previous 24 hours. With a live market cap of $344 million, CoinMarketCap now ranks #96. It has 36,638 YFI coins in circulation and a maximum supply of 36,666 YFI coins.

YFI

YFI has formed a descending triangle pattern on the 4-hour timeframe, which is supporting the coin at the $8,480 level. YFI’s immediate resistance remains at $7,400, and a break of this level has the potential to drive further selling to the next support level of $6,410.

A bullish breakout of the $10,500 level could expose the YFI price to 12,300.

DeFi Could Benefit from the Upcoming Crypto Winter

Given that it currently represents a small portion of the entire crypto market, DeFi has opportunities to grow in the future, either relative to or in absolute terms. However, it is only applicable to DeFi projects that complete this trail.
Although it is too early to predict who will succeed and fail in the DeFi sector, two characteristics will help ventures succeed over the next bull market cycle.

The capacity of Crypto Whales

DeFi protocols are simply structures with varying degrees of complexity, such as liquidity pools. When we apply the cracked aquarium image to DeFi, we can immediately see how problematic an overly large crypto whale could be. Setting limits on whale involvement and transaction volume can help DeFi protocols that want to protect their ecosystem by attracting a dependable and diverse investor base.

It would also limit protocol expansion in the short term, but long-term TVL growth will be linked to increased security and financial strength.

DeFi Integration With Authorized Custodians

A DeFi protocol’s performance is generally associated with a wide range of assets. The protocol keeps some of this on-chain while investors receive token distributions of other types. For instance, DeFi protocols provide economic value tokens to investors. As a result, these digital assets must be kept in a secure location. However, some initiatives have been challenging to put into action.

Since the DeFi market is expanding, custodians must constantly update their platforms in response to new trends and technology. Custodial solutions that make it simple for investors to participate in the decentralized economy and quickly implement strategies using decentralized apps boost the DeFi sector’s economic worth and security.

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