Continue Horse: Why is DeFi’s rally weak?

Why isn’t DeFi rising or not rising sharply?

The left-hand public chain and the right-hand DeFi are still the main keynote set last year. Now we have to add: horizontal approval of WEB3. This is a programmatic direction. We will be firm and unwavering for three years.

Recently, GameFi/NFT has set up a stage, the new public chain is performing, we will talk about WEB3 separately later. Public chains are basically market dream rates, and rely heavily on benchmarking theory, that is, your public chain is valued at 10 billion, so even if it is a public chain white paper, how can it be valued at 500 million? When Polygon and Axie ‘s Ronin use it When the side chain finds a new breakthrough direction, it has a great catalytic effect on the influx of newcomers into a public chain. The market finds that the demand after expansion is still huge, but the current ETH is not enough to support the huge daily active users. When thinking about the theme of WEB3, there have been such problems. If ETH 2.0 is now fully delivered and there are no problems such as expansion and congestion, what will users do? I think this answer has become clearer.

Returning to DeFi, we see that DeFi is still growing rapidly, but on the growth curve, it is certainly not a 90-degree pull-up outbreak like WEB3. DeFi users will definitely increase for a long time in the future, but the marginal growth rate will be. Gradually, this is one of them;

DeFi users continue to grow and the curve slows

DeFi users continue to grow and the curve slows

Second, if you carefully observe the trading volume, the daily trading volume of CoinBase fell to about 2 billion in the first few months. At the same time , the daily trading volume of UNI was about 1 to 1.5 billion. Now CoinBase can probably recover to 4 billion daily, but UNI The daily trading volume is still 1 to 1.5 billion. With such a transaction, the big three lenders are also facing a shift from growth stocks to white horse value stocks. The core issue is the growth rate of the previous month. We know that the stock price = E*PE, the formula is very simple, that is, there are two variables that determine the stock price, one is profit and the other is valuation. Similarly, when UNI’s trading volume remains unchanged, the profit remains unchanged, and the stock price must rise only You can rely on the increase in valuation. If you still have the impression that the currency exchange FTX/Binance and other long-term PEs are around 5-10, it will be more difficult to increase the valuation and increase the expectation of sustainable growth in the future. Yes, so the price of UNI is basically a Beta increase. UNI dominates Dex’s 60% market share, and UNI and other DeFi may also be able to find out.

Peak 10 billion

Peak 10 billion

The proportion of Dex will continue to increase

The proportion of Dex will continue to increase

Third, rising tides require continuous influx of living water. After a year or two of eruptive development of DeFi, the basic core track has been determined. It is now difficult to find exciting projects, so we just need to stay stuck. The core varieties, basically the entire future DeFi growth dividend can be enjoyed as many, the only variables are in the derivatives track, which is also one of the reasons for high hopes for Perp/Dydx, now you can manually brush Dydx every day when you have time. , Have fun.

DeFi fundamentals regain lost ground

DeFi fundamentals regain lost ground

Therefore, there is no need to worry about the long-term growth of DeFi. If the public chain DeFi basic disk is set up, there is no need to worry too much, and focus on researching WEB3. After all, there is a wild and uncultivated new world of navigation.

 

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/continue-horse-why-is-defis-rally-weak/
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