AAVE’s token price has risen 67% in the past 60 days. Who has the chance to become the next AAVE? It’s time for us to turn our attention to DeFi.
I think the most promising one is Lido Finance and its token $LDO. The Lido token was launched late in the last bull run and peaked at around $6. Today, it is trading at $1.11, 32% lower than a year ago and down 50% in the past 60 days. I used this opportunity to buy more LDO,
The three largest DeFi protocols by total locked value (TVL) are Lido, Aave, and Maker.
The total market capitalization of AAVE, LDO, and MKR tokens is less than $5 billion. Meanwhile, blockchains with fewer users (such as Cardano) have a market capitalization of $13 billion, Avalanche has a market capitalization of $9.5 billion, top memecoins (such as Dogecoin) have a market capitalization of $15 billion, and Shiba Inu has a market capitalization of $8 billion.
Are these DeFi tokens undervalued?
Lido Finance has the most value locked on the chain. The amount of staked on Lido is $25.8 billion, almost 1/3 of the total value on the chain. Its closest competitor RocketPool has nearly 90% less stake than Lido Finance. But RocketPool is only 25% of Lido's value.
Lido Finance is one of the most profitable platforms on the chain. As its TVL increases, the Lido protocol will incur more fees
Lido Finance has a strong reserve of funds. More importantly, the $116 million reserve is mainly composed of major currencies (BTC and ETH). In contrast, most of the reserves of Aave or Maker are tokens.
LDO has experienced huge downward price pressure and is currently priced nearly 80% below its all-time high. Based on its unique value proposition, I believe its huge moat can resist competition and its fundamentals are stronger than 99.9% of crypto projects today. This is the fundamental reason why I am bullish on Lido's potential upside.
