Tokens climb up to 83% and traders talk about new high season for DeFi

Decentralized financing (DeFi) was one of the main factors driving the cryptocurrency market throughout 2021 and, so far, platforms such as Uniswap (UNI), SushiSwap (SUSHI) and Aave (AAVE) are the basis of the sector.

Similar to altcoins, DeFi tokens took a beating when Bitcoin price corrected from its historic high of $65,800, and data from Cointelegraph Markets Pro and TradingView show that since the DeFi index, the perpetual futures contract hit a low of $5,340 on July 20th. Since then, the value of the index has risen 45% to $7,682, and that has left analysts watching to see if a reversal is needed.

1-day graph of the DeFi index perpetual futures contract. Source: TradingView

Total amount blocked reverses course

In DeFi, Total Blocked Value (TVL) is a metric used to determine strength and weakness across platforms.

Total Value Locked in DeFi. Source: Defi Call

While this metric is still about 30% below its historic record of $154.91 billion, the metric has increased from $3 billion in July 2020 to $111.04 billion in July 2021.

Of the top 20 DeFi platforms, the highest percentage growth in TVL over the past seven days was a 68% increase in the Flexa (AMP) protocol and a 38% increase in the Lido (LDO).

DeFi tokens increase as user activity increases

Further evidence of continued recovery in the DeFi sector can be found in the rising token values โ€‹โ€‹of some of the emerging protocols.

XVS, LUNA, RSR, AMP and KAVA (USDT pairs). 4-hour chart. Source: TradingView

According to the top 20 DeFi protocols, LUNA and AMP were the two biggest price winners in the last seven days, with increases of 83% and 64%, respectively.

While the daily trading volume seen on the decentralized exchanges remained relatively stable below the $2 billion level last month, the price of Uniswap increased by 17.8% and SushiSwap increased by 21.5% between July 21st and July 27th. July and user activity appears to be linked to an uptrend.

Daily volume of DEX volume. Source: Dune Analytics

The continued increase in the number of new users interacting with DeFi protocols is another sign of the growing strength of the industry, with a record 2.091 million unique addresses interacting with a DeFi protocol as of July 27th.

Total DeFi users over time. Source: Dune Analytics

All in all, these developments have caught the attention of analysts and investors awaiting a ‘DeFi Summer 2.0’.

With DeFi tokens generally showing some strength again, it looks like we can get #DeFiSummer 2.0

– danso.eth (@ samueldans0) July 6, 2021

The views and opinions expressed herein are those of the author alone and do not necessarily reflect the views of Every investment and trading move involves risk, you must conduct your own research when making a decision.


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Thomas Miles

Cryptocurrency is the most recently discovered currency which will be likely at the help of modernization across the next few decades. With a limited control from the government, the crypto market is independent of many features of a sound market as we know it. Thomas brings these stories to us by weaving them into articles of general importance to all those looking at the fluctuations in the market, or new entries. Thomas is also the founder of Bulletin Bits and is an excellent leader. His leadership is the kind that makes him the most knowledgeable and experienced on the team. His wonderful work ethic and attitude are worthy of imitation!

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