Decentralized finance (DeFi) earnings took a downturn in the second quarter of 2020, but DeFi tokens are rocketing to new highs thanks largely to yield farming – suggesting DeFi could become the financial industry’s answer to Tesla.
American electric card producer Tesla is famously valued at around USD 268 billion by investors, despite the fact that it is yet to turn a profit. And DeFi could be the finance industry’s growth engine for the industry 4.0 era.
According to the Bankless program’s token report for Q2, the similarities are striking.
The report’s authors wrote,
“As we mentioned in earlier pieces, [the company] was suffering from front-running attacks that disproportionately reported earnings for the derivatives protocol.”
The downturn in earnings did not really put a dent in DeFi token performance from April to June 2020, as, on average, DeFi assets rose by 199% in the second quarter, largely outperforming both ethereum (ETH) and bitcoin (BTC). The two leading tokens expanded by 70% and 43%, respectively, according to Bankless.
There were also some stunning rises among the statistics. The authors noted,
“The best performing DeFi asset in the quarter was Bancor’s BNT as the token surged 546% following the announcement of the liquidity protocol’s V2 upgrade.”
They also pointed to Aave’s LEND. In Q2, it rose by 514% while the “protocol simultaneously increased its value locked from USD 30 million to over USD 120 million by the end of June,” they continued.
Another Q2 report on DeFi, compiled by crypto research company TokenInsight, pointed at the growth in DeFi user numbers this year.
The TokenInsight report’s authors wrote,
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