- The data concludes the trend of issuing governance tokens that have not held their value so far
- eToro will evaluate the rudimentary value of the coins and governance price token remains speculative.
It’s been a while since DEXs lunacy spread among the DeFi economy. The growth can be seen through the doubling of its volume in months.
According to data of CoinMarketCap, It is observed that Compound’s COMP, Yam Finances YAM, SushSwap’s SUSHI, and BurgerSwap’s BURGER these currencies have all seen massive marketability at launch time. However, beyond the initial hype, these tokens failed to hold their values.
The data concludes the trend of issuing governance tokens that have not held their value so far.
The trend of Initial Public Offering (IPO)
Digital currencies have always adopted terms and concepts of traditional finance, as the idea of Initial Coin Offerings (ICO) have arisen from traditional IPO. However, an IPO is a signal for investors’ confidence for the firm’s future, an ICO is a free-for-all service, where anyone can mint digital tokens. It is observed that there is always an Already-established product available with DeFi tokens, and its governance coins always offer a future stake in the blooming of those products. Unlike ICO tokens, the concept of IPOs is more approximate to DeFi tokens.
According to Omris Ross, chief blockchain scientist at eToro’s trading platform, after space’s originality and several complex factors, those will evaluate the rudimentary value of the coins and governance price token remains speculative.
Lacking Bitcoin’s association
DeFi resists a bigger trend within the crypto market, though, with IPOs, DeFi has a spectral relation. It is observed that several coins gravitate to follow BTC’s movement of price. In contrast, Bitcoin has been trading within a narrow range over September, and DeFi has shown a price unrelated to the BTC market.
According to Curis Wang, Co-Founder and Chief Executive Officer of Bitrue exchange, the DeFi tokens investors know that the DeFi projects are going too far from what Bitcoin ever aimed to do.
An attractive haven for hackers and money launderers
The recent charges against BitMEX exchange and KuCoin’s hack have demonstrated that DeFi is a haven for money launderers. BitMEX has highlighted that lacking KYC and anti-money laundering checks can end up supporting hackers, whereas, from KuCoin, it is revealed that hackers use DeFi platforms to drain out the stolen amount.
According to Ross, these issues may bring a decline in the DeFi product demand. He also mentioned that if the DeFi space continues to rise like this and attract more funding attention, then maybe in the future, it will require to integrate protocols for KYC and AML building blocks.
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