DeFi Tokens Challenge Bearish Trend and Surge Over 20% in the Week
With US Treasury yields reaching highs not seen since 2007, DeFi protocols exploring real-world asset trends are on the rise.
Several cryptocurrencies supporting high-quality decentralized finance (DeFi) applications are defying the overall bearish market trend.
CurveDAO's native governance token, CRV, has surged by over 21% in the past seven days as users minted $114 million worth of crvUSD, the newly launched stablecoin by Curve Finance, backed by Bitcoin (BTC), Ethereum (ETH), and liquid staking derivatives of ETH as collateral.
Moreover, governance tokens behind Maker (MKR), Frax Share (FXS), and Chainlink (LINK) recorded weekly gains of 8% to 9%.
According to CoinGecko data, the broader DeFi lending sector has witnessed growth, with most tokens trading higher over the past seven days.
Real-World Assets on the Rise
The positive movement can be attributed to the surge in real-world assets (RWAs) and liquid staking tokens used as collateral in each of these applications.
RWAs represent traditional financial instruments like bonds or corporate debt that have been tokenized.
Total deposits in RWA asset protocols have been on the rise, as per DeFiLlama data. RWA asset protocols are decentralized applications for tokenized RWAs.
Another recent CoinGecko report found that total deposits in liquid staking protocols have surged by 5,870% since January 2023, reaching $919.0 million by the end of August.
Liquid staking derivatives (LSDs) refer to tokens like Lido's stETH, which provide users with a tokenized representation of their locked staking position on the Ethereum network, which can then be reused within the DeFi sector.
In a market that has seen bearish trends, these DeFi tokens' resilience and the rise of real-world asset-backed DeFi projects are offering traders new opportunities for growth and diversification. However, as with any investment in cryptocurrencies, caution and due diligence are essential.
