“DeFi, DeFi, still f*cking DeFi.”
After DeFi collective correction in September-October, the chattering blue-chip projects had lost faith and threw away their $1 billion and even $10 billion valuation targets. It wasn’t until the collective rally in early November that the blue chips realized that the target they had set was not a pie in the sky, but achievable.
After a round of DeFi reshuffle, the leading stock position of $ASSY (ASUY) is basically established, and the valuation is gradually approaching $1 billion and standing firm, while the valuation of currencies such as REN/NXM still remains in the $300 million range, falling into the second-tier DeFi position. At the same time, upstarts like COVER/KP3R are attacking the previous round of DeFi like a flood, vowing to take their place. If the project doesn’t close the geometric gap with the competition in terms of users and traffic, or if it stagnates and doesn’t innovate after reaching a certain level of success, it’s only a matter of time before the newer projects catch up with them.
Polychain liquidated more than 1,300 MKR tokens. It is not known which position has been changed, but at least it makes us understand that we can no longer stick to the classical DeFi such as COMP and MKR, and only those DeFi who embrace the new era can make money. Remember, never stand against the money.
AXS was launched at the beginning of November, and its secondary market performed well, with 6x gains. But just one project is far from driving a track. NFT is not the mainline of this round of bull market, DeFi is. After the September-October pullback, the strong counterattack in November, and the recent market of various DeFi projects, it makes me more determined on one thing: DeFi is not only the biggest focus of this round of bull market but actually it is the big trend. 2013 Bitcoin, 2015 Ether, 2020 DeFi. After all, the essence of the blockchain is finance.
Algorithmic stablecoin and the Rebase concept have risen again recently, and I thought this track was going to die, but of course, I haven’t studied it too much myself and haven’t had any experience on the subject. However, several new algorithmic stablecoins have performed well, with ESD gaining 10x a month and BASE gaining 10x 2–3 days recently. When the market is good, algorithmic stablecoins will always come, and each round of the market will give birth to a different play with micro-innovations. Algorithmic stablecoins are characterized by their simplicity, which is very popular among players with strong gambling habits and a high-risk appetite. It seems to be an indicator of the market.
One of the recent hot ideas abroad is ASSY(AAVE/SNX/SUSHI/YFI)vs CUM(COMP/UNI/MKR), with the former being a community-based project and the latter being a Silicon Valley VC-based project. According to the DeFi pullback, ASSY’s rebound is much stronger than CUM’s.
But what I’m struggling with is the battle between UNI and SUSHI.
I’ve always been a firm believer in UNI, but the recent arguments of foreign ASSY, as well as a set of combinations by AC and SUSHI and other second and third-tier DeFi projects, coupled with Sushi’s excellent performance and the platform’s rising trading volume (COVER and later KP3R’s main trading volume on Sushi), have made me waver a bit. It turns out that it’s possible for me to use Sushi as well.
According to AC’s style of play, it is obvious that he wants to shift the major trading volume of some tokens to Sushi, whether it is in the short term to do the game, or really wants Sushi to develop in the long term, Sushi is really the focus recently. From the point of view of speculation, Sushi is indeed a good value for money deal.
As for the three DeFi projects, YFI/AAVE/UNI, the difference, as mentioned above, is that the first two, YFI and AAVE, have fully released and exchanged tokens, while UNI has most of its tokens in the hands of private investors. This made me realize once again that the tokenomics is about more than fundamentals.
According to historical experience and data, most of the projects with good investment returns come from community projects, and most of the current unicorn projects and leading projects also come from the community. We can only say that community projects have the following advantages: small market capitalization and large space, sufficient and clean release of tokens, no excessive lock-ups, extensive community participation and easy to accumulate consensus. In essence, they are still a game of token.
There are still many opportunities in DeFi, but the format is constantly changing and very subtle. The only way to grasp the potential investment opportunities is to keep thinking, admit mistakes and make adjustments and changes. The above is a summary of my thoughts over the past two months. In a nutshell:
“DeFi, DeFi, still f*cking DeFi.”
Article from RealSatoshi
Translated by Yang(Mengyan Finance)