Anton Chashchin, Commercial Director at CEX.IO Loan
Almost all DeFi projects are about liquidity pools, instant loans, decentralised exchanges, lack of regulation and immense ROIs that most people aspire to when investing their money in DeFi assets. Some of them were proved right during the month of November that saw a sizeable batch of DeFi tokens taken to considerable heights.
In the list below, I ranked the DeFi assets with highest capitalisations that were able to make the most gains in November 2020. Compiling this list, I referred to the DeFi market data provided by DeFi market aggregator Messari. Continue reading and find out how the most prominent gains were made.
1. SushiSwap (SUSHI) – 160%
SushiSwap is a fork of its parent project Uniswap; SUSHI is an ERC20 standard token, being one of the most popular DeFi tokens of 2020’s summer, SUSHI was one of the front-runners in the second wave of DeFi popularity this November. SushiSwap utilises automated market making and incentivises users to hold SUSHI giving them fees for providing liquidity on the SushiSwap decentralised exchange.
Sushi found the bottom at the start of November, and most of November’s SUSHI growth happened in the second week of November – 95,5% to be exact. Some 29.4% was earned in the third week, and the fourth week saw SUSHI lose 12% of its price. The SUSHI market cap constitutes $0.35 billion, according to Messari.
2. Yearn.Finance (YFI) – 152%
Andre Cronje’s Yearn.Finance announced 4 mergers in November with different protocols. Among them are Pickle Finance, Cream Finance, Cover and Akropolis. The mergers expanded the Yearn.Finance liquidity pool and its ecosystem. The merger with Pickle Finance supported the pool that had suffered a $19.76 million dollar attack worth of users’ DAI and gave Yearn.Finance another liquidity pool to harvest. The merger with Cream Finance let Yearn.Finance users receive and take loans in Cream through the tokens staked in liquidity farming.
The merger with Cover – a market coverage provider – made Cover’s token CLAIM collateral as well as borrowable for borrowing and loaning YFI respectively. According to Yearn.Finance’s announcement, the merger with Akropolis will allow the Yearn protocol to benefit from Akropolis’s business development expertise and their institutional contacts. No wonder, that this series of mergers saw YFI surge by 187% in the third week of November and close the month with no less astounding 152% of monthly profit.
The market valuation of Yearn.Finance has topped $0.9 billion, according to Messari, and is on the way to the $1 billion mark.
3. THORchain (RUNE) – 109.4%
THORchain is a liquidity protocol and cross-chain trading protocol that incentivises users to provide liquidity and create a marketplace for digital assets that can be traded trustlessly and permissionlessly without having to lock up one’s own RUNE tokens. THORchain enables users to swap digital assets located on virtually any blockchain regardless of its protocol.
Liquidity providers are motivated to provide liquidity for THORchain by the fees they receive for the swaps performed in the liquidity pool they have created. Each liquidity provider reserves a relative share in the liquidity pool, which matches the share of the fees that is distributed among all THORchain liquidity providers for the swaps performed using the pool’s liquidity.
The market capitalisation of THORchain has topped $0.16 billion.
4. Uniswap (UNI) – 66.3%
The UNI token representing the Uniswap decentralised exchange was another high-ranking DeFi token by the size of market capitalisation that saw considerable growth in November 2020. The token began with a serious drop to a historical low of 1.761 but quickly retraced the losses. The token was rising consistently through the first two weeks of the month and rose to a new all-time-high of 4.487 on 24th November but rapidly in the next two days to 3.10. At the end of the month UNI was 3.775, giving its owners a hefty monthly profit of 66.3%.
The Uniswap market capitalisation has reached $0.97 billion.
5. Synthetix (SNX) – 57%
Synthetix is a decentralised exchange for any real-world derivatives that generates liquidity through incentivizing its users through a yield-making staking scheme. Creating synthetic assets, the users of the DEX can trade high premium bonds and the world’s leading companies.
The SNX token reached a new all-time-high in November of 5.8305 but finished the month at 4.7436. The token’s market capitalisation has reached $0.59 billion.
The new approach to exchange liquidity put forward by the DeFi space has made a significant paradigm shift in the entire cryptocurrency market, opening up new opportunities for privacy and high liquidity. Proof to that is the data from Dune Analytics, showing that since the beginning of October the value locked in decentralised applications has climbed to a record of over $14.4 billion.
As the DeFi space has only recently started to attract large public attention and show substantial financial growth, DeFi assets may still have lots of profits in store. Meanwhile, the projects listed above could still make up a solid investment portfolio with reasonable risks and solid returns.