Decentralized financial tokens (DeFi) continue to move drastically in the price charts and offset Bitcoin’s low volatility, which has recently reached a three-year high. The Aave (LEND) and Synthetix Network (SNX) tokens briefly outperformed the MakerDAO (MKR) token today, as everyone rose to $ 0.375 and $ 4.09, respectively.
The “change” was short-lived and MKR has now regained its position via LEND, SNX and Compound (COMP) and is currently ranked 28th by Coinmarketcap with a market cap of $ 453 million.
The change was likely to occur when the LEND price corrected sharply today, dropping 16.5% to $ 0.313.
Market capitalization of LEND, SNX, MKR. Source: CoinMarketCap
LEND has recently surpassed MKR by posting new peaks of all time every day. As the hype surrounding the growing DeFi sector continues to grow, governance tokens are among the best tokens of 2020.
The tokens do not offer the holder a direct monetary advantage other than speculative profits, but rather allow them to vote in the protocol’s decision-making process. For some investors They see this as an incentive or long-term bet for the success of the DeFi sector.
Investors rely on DeFi’s long-term growth
The concept behind LEND is somewhat similar to MKR, but they differ in the way they create credit and lending opportunities because their respective tokens allow users to vote on protocol changes. This is particularly important in the case of MakerDAO, the rYour community needs to monitor the price of Ether (ETH) to ensure that DAI is pegged to the US dollar.
SNX is the underlying token for the decentralized Synthetix exchange, where users can exchange on-chain assets that are tied to the value of assets such as gold and stocks. Basically SNX holders have incentives to tie their tokens to create these tradable assets with bonuses.
Synthetix recently announced a new decentralized asset management platform called dHedge. Aave is also introducing new features to its protocol. Speaking to Cointelegraph, Aave CEO Stani Kulechov said:
“Aave will also allow the transfer of credit, with Party A delegating its line of credit to Party B, which can borrow. All of this will be possible thanks to a legal agreement through OpenLaw. For example, a credit delegate could be a party that wants to borrow more, and a borrower could be a company, an NGO, a government, an institution, etc. “
As the DeFi room continues to boom and make profits that are reminiscent of the ICO madness (Initial Coin Offering) in 2017, Signs of a similar bubble scenario occur when a large number of obscure projects generate three-digit earnings every week. Despite these signs, institutional investors seem to be paying attention to this new financial world.