The two decentralized finance (DeFi) protocols have skyrocketed, while the Bitcoin (BTC) price has seemed to have settled in recent days.
Statistics reveal that leading DeFi protocols are gaining value, including Aave (AAVE) and SushiSwap (SUSHI).
Both AAVE and SUSHI prices have more than tripled in just one month since December. Investors attribute the strong bull market captured by DeFi tokens to the “re-rating” of major DeFi projects.
Bitcoin Price Index: 1 Bitcoin How Many TL? (BTC TL)
Daily price chart (Binance) of SUSHI / USDT pair. Source: TradingView
SUSHI, which saw the lowest level of $ 1.1 on December 23, reached $ 7,798 on December 17.
Why is SUSHI and Aave “remastered?”
The DeFi market has achieved incredible performance since 2020. Just knowing that the total value locked in DeFi protocols (TVL) exceeds $ 22 billion is enough to understand how the market is growing fast.
The total amount (USD) locked on DeFi. Source: DeFi Pulse
Despite rapid growth, most DeFi protocols hovered around $ 1 billion in value. Many altcoins, on the other hand, have a multi-billion dollar market capitalization, but they are facing lower user transactions and their cash flows are low.
DeFi protocols are unique in that they generate cash flow. Based on the rapidly growing user base of most DeFi protocols and the increase in cash flows, investors said DeFi protocols are undergoing a “reclassification” process.
US-based DeFi fund ParaFi partner Santiago R Santos on the subject in the following statement found:
“DeFi protocols in the top 20 are in a drastic reassessment process. As stupid as it may seem, it’s like being on the first page of Google search results… So far, DeFi protocols have been limited.”
Santos emphasized that it is difficult to define an asset class like DeFi, which is capital-efficient, profitable and growing fast.
What awaits the DeFi industry?
Currently, Aave and SUSHI market values are at the level of $ 2.2 billion and $ 900 million, respectively. Still, analysts say both are of low value given the user activity on the platforms.
SushiSwap, for example, is constantly improving its record monthly sales volume. Messari analyst Ryan Watkins said that SushiSwap is on track to quadruple its all-time high monthly volume reached last month. told:
“Uniswap increased its all-time monthly volume by 1.5 times in September 2020. SushiSwap rose to 4 times its all-time monthly volume last month. These increases will generate $ 6.4 million in earnings for token holders.”
SushiSwap monthly volume. Source: Messari
If the DeFi market continues to grow at its current pace, leading DeFi protocols will see higher cash flows, making them even more valuable.
Arthur Cheong, partner of DeFiance Capital, one of Asia’s largest DeFi funds, made a statement on January 13. in the statement“Sushiswap is worth less than it should be,” he said.