Decentralized finance (DeFi) tokens from Balancer, Ben, Aave and Swissborg have all made huge gains, in the wake of excitement generated by the distribution of Compound’s governance token.
Less than twelve hours after Balancer announced its protocol governance token BAL was live on the Ethereum mainnet, and the price jumped from $6.65 to $22.28. At the time of writing, the DeFi token was trading at $15.60, with a little over 6 million BAL tokens in the circulating supply.
It’s following in the footsteps of COMP which more than tripled in value this week. Even after today’s price crash, it’s still up by 135%.
LEND skyrockets, REN and SNX reach ATH
According to data from CoinMarketCap, altcoins Aave (LEND), Ren (REN), and Synthetix (SNX) also had strong rallies this week.
LEND, a token from London-based DeFi lending platform Aave, has seen a 3,900% increase in price since trading under $0.01 for almost a year from November 2018 onwards. The token first rallied to $0.05 in May, then surged to $0.16 on June 21.
Synthetix, a Australian leader in DeFi derivatives, and the newly launched REN, saw new all-time highs today. The price of SNX rose 40% this week continuing its bullish trend of a 100% increase over the last 30 days to reach an ATH of $1.61.
Both tokens have been looking bullish since late March following the crypto bloodbath. On June 23, the price of REN reached $0.16, respectively, an increase of more than 400%.
SwissBorg looking at all-time highs
Decentralized wealth management platform Swissborg’s CHSB token is currently trading at $0.14, having reached a new all-time high of just over $0.16 on June 17. For much of 2020, the price of the DeFi token was hovering around $0.02.
Why are DeFi tokens doing better?
Cointelegraph has reported many DeFi tokens have consistently been outperforming Bitcoin (BTC) in 2020. The adoption of these coins backed by DeFi projects may have been spurred by the launch of COMP, which recently started trading on Coinbase.
These significant rallies—from LEND in particular, rising 3,900%—may be the result of the number of DeFi users reaching 600,000 and the hype surrounding ‘yield farming’.
Traders could be moving on to new DeFi assets after seeing the potential in COMP, whose price doubled to more than $400 a few days after first trading between $140-$180 on June 18. In addition, some publications including Forbes have touted DeFi ‘yield farming’ as a means to get a 100% return on an annualized basis.
As these tokens operate on the Ethereum mainnet, the expected introduction of Ethereum 2.0 later this year may continue to mean bullish sentiment for some DeFi projects rivaling that of the ICO boom in 2017, or it could all be just another bubble waiting to pop.