DeFi is mooning, why isn’t ETH?
DeFi tokens are mooning.
After a slew of protocol upgrades implementing better token economics, and gradual increases in DeFi's economic activity, DeFi tokens are finally getting some credit. Many DeFi tokens are up triple digits on the year, and excitement around these projects is reminiscent of the early days of the 2017 ICO boom.
Source: Messari Portal
The excitement reached its 2020 high over the past week with Compound’s epic and ongoing token distribution event that saw its native token COMP rise from $16 to as high as $381. COMP quickly became the most valuable token in DeFi and the Compound protocol quickly accrued the most value locked in DeFi due to the gravity of liquidity mining. Compound’s token distribution was an emphatic statement of DeFi's growing relevance.
Yet, seemingly lost in all the hype is the native asset of the blockchain all this DeFi activity is taking place on. If all these tokens live on Ethereum, why have none of the animal spirits trickled into ETH?
Moon economics
Ryan Watkins was a Senior Research Analyst at Messari. Previously, he worked at Moelis & Company as an Investment Banking Analyst where he worked on deals in the technology, telecom, and fintech sectors. Ryan graduated Magna Cum Laude from the Gabelli School of Business at Fordham University.