DeFi (Top Decentralized Finance) coins are falling despite the strong Ethereum price.
Data from Uniswap shows that coins such as UNI, Compound’s COMP and Yearn.finance’s YFI are down 1-5% against the US dollar in the past 24 hours.
This slight decline in the price development of these coins is contributing to an overall consolidation trend seen in the DeFi market over the past week. After a strong breakout in January that passed in early February, the DeFi market cooled off fairly quickly.
The DeFi market stumbles as Ethereum hits new highs
The DeFi market is stumbling as key market players do not respond positively to Ethereum’s push to new all-time highs.
Coins like UNI, SNX and COMP are falling against Ethereum and in some cases against the US dollar.
This consolidation appears to be due to the capital flowing back into Ethereum itself and other first-level blockchain coins such as Binance Coin (BNB) or Cosmos (ATOM).
The image below from CoinGecko shows the performance of the 13 best DeFi coins over the past few days and weeks.
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Decentralized finances are validated against the Federal Reserve report
While the near-term health of the DeFi market may look grim, decentralized financial history picked up momentum last week.
The St. Louis Federal Reserve, a branch of the US Federal Reserve, released a report indicating that DeFi could “lead to a paradigm shift in the financial industry.”
The author of the report, a blockchain professor at the University of Basel, explained the matter:
“DeFi has triggered a wave of innovation. On the one hand, developers use smart contracts and the decentralized settlement layer to create trusted versions of traditional financial instruments. On the other hand, they create completely new financial instruments that could not be realized without the underlying public blockchain. “
While not direct endorsement from the Federal Reserve, the thesis that DeFi will positively disrupt funding has gained momentum in recent weeks and months.
The general idea is that DeFi should add more value in the long run as blockchain systems are relatively open compared to traditional systems.
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Selected image from TradingView.com’s Unsplash Chart Price Tags: UNIUSD, UNIBTC, COMPUSD, COMPBTC Uniswap, Compound, other DeFi coins slide down
