Advertising

DeFi summer 2.0? ‘Gen 2’ tokens on a tear amid wider market slump

votes
Article Rating
Will this be the DeFi Summer 2.0?
Decentralized finance ‘Gen2’ tokens sprint forward as the broader DeFi market gasps for air.

As some brand-name decentralized finance (DeFi) tokens sputter, a crop of new projects have emerged that are catching strong bids on the back of aggressive yield farming programs, generous airdrops, and significant technical advances. 

It’s a set of outlier projects pushing forward on both price and fundamentals that have led one crypto analyst, eGirl Capital’s mewny, to brand them as DeFi’s “Gen 2.”

Mewny, who in an interview with Cointelegraph pitched eGirl Capital as “an org that takes itself as a very serious joke,” says that Gen 2 tokens have garnered attention due to their well-cultivated communities and clever token distribution models — both of which lead to a “recursive” price-and-sentiment loop. 

“I think in terms of the market interest it’s more about seeking novelty and narrative at this stage in the cycle. Fundamental analysis will be more important when the market cools off and utility is the only backstop to valuations. Hot narratives tend to trend around grassroots projects that have carved out a category for themselves in the market,” they said.

READ more:  Bittrex will remove the U.S. markets for top privacy coins including Monero, Zcash and Dash

While investors might be eager to ape into these fast-rising new tokens, it’s worth asking what the projects are doing, whether they’re sustainable, and if not how much farther they have to run.

Pumpamentals or fundamentals?

Will this be the DeFi Summer 2.0?
Decentralized finance 'Gen2' tokens sprint forward as the broader DeFi market gasps for air.

The Gen 2 phenomena echo the “DeFi summer” of last year, filled with “DeFi stimulus check” airdrops, fat farming APYs, and soaring token prices — as well as a harrowing spate of hacks, heists, and rugpulls

However, mewny says that there’s a population of investors that emerged from that period continuously looking for technical progress as opposed to shooting stars. 

“There are less quick “me too” projects in defi. An investor may think that those projects never attracted much liquidity in the first place but they overestimate the wisdom of the market if that’s the case. They did and do pull liquidity, especially from participants who felt priced out or late to the first movers.This has given the floor to legitimate projects that have not stopped building despite the market’s shift in focus. ”

One such Gen 2 riser pulling liquidity is Inverse Finance. After the launch of a yield farming program for a forthcoming synthetic stablecoin protocol, the Inverse Finance DAO narrowly voted to make the INV governance token tradable. As a result, the formerly valueless token airdrop of 80 INV is now priced at over $100,000, likely the most lucrative airdrop in Defi history. 

READ more:  Bitcoin is boxing up to $25,000

Another Gen 2 star is Alchemix — one of eGirl Capital’s first announced investments. Alchemix’s protocol also centers on a synthetic stablecoin, alUSD, but generates the stablecoin via collateral deposited into Yearn.Finance’s yield-bearing vaults. The result is a token-based stablecoin loan that pays for itself — a new model that mewny things could become a standard.

“eGirl thinks trading yield-bearing interest will be an important primitive in DeFi. Quantifying and valuing future yield unlocks a lot of usable value that can be reinvested in the market,” they said.

The wider markets appear to agree with eGirl’s thesis, as Alchemix recently announced that the protocol has eclipsed half a billion in total value locked:

Source: Cointelegraph
Original Author: ANDREW THURMAN
Original Post Date: March 07, 2021 @ 01h00

votes
Article Rating


Follow us on Facebook, Twitter, Instagram, and Telegram, and don’t miss any crypto news.


Disclaimer:

The information expressed in this article is solely those of the author and do not necessarily reflect the vies of CryptoDeFinance.  Each and every investment and trading move involves high risk. You should always conduct your own research when making a decision in crypto investment.
Share on facebook
Share on twitter
Share on linkedin
Share on reddit
Share on tumblr
Share on telegram
Share on whatsapp

Bruno Marques

Hi! I am the CEO/Founder of Crypto DeFinance, and I am an Enthusiast crypto investor. I started this project so we can provide you with carefully curated news. If you like us and our news, share the posts and comment. Your visit and interaction is very important to us.
Subscribe
Notify of
guest
0 Comentários
Inline Feedbacks
View all comments

MORE NEWS

bitcoin
Bitcoin (BTC) $ 63,568.00
ethereum
Ethereum (ETH) $ 4,127.04
cardano
Cardano (ADA) $ 2.18
binance-coin
Binance Coin (BNB) $ 477.50
dogecoin
Dogecoin (DOGE) $ 0.246730
matic-network
Polygon (MATIC) $ 1.51
pancakeswap-token
PancakeSwap (CAKE) $ 20.01
0
Would love your thoughts, please comment.x
()
x
Don't Miss The Latest Crypto News! Subscribe Now